HomeMy WebLinkAboutResolution No. 2026-048CITY OF THE COLONY, TEXAS
RESOLUTION NO. 2026 - 048
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE
COLONY, TEXAS, AMENDING THE CITY'S FINANCE POLICY
SECTION 100.07- PURCHASING FOR THE CITY OF THE COLONY,
TEXAS; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING
FOR AN IMMEDIATE EFFECTIVE DATE.
WHEREAS, on September 2, 2025, the City of The Colony adopted a revision to the
Purchasing Policy Manual; and
WHEREAS, the City Council of the City of The Colony, finds and determines the City's
Purchasing Policy Manual, attached hereto as Exhibit A, should be amended to address revisions
that are administrative in nature and are intended to provide clearer guidance to City staff while
promoting consistency in the administration of purchasing and financial processes.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF THE COLONY, TEXAS:
SECTION 1. The findings set forth above are hereby found to be true and correct findings
of the City and are incorporated into the body of this Resolution as if fully set forth herein.
SECTION 2. The City Council of the City of The Colony, Texas, does hereby approve
the amended Purchasing Policy Manual, a copy of which is attached hereto as Exhibit A, and is
incorporated herein for all purposes.
SECTION 3. If any section, article paragraph, sentence, clause, phrase or word in this
Resolution, or application thereto to any persons or circumstances, is held invalid or unconstitutional
by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining
portions of this Resolution; and the City Council hereby declares it would have passed such remaining
portions of this Resolution despite such invalidity, which remaining portions shall remain in full force
and effect.
SECTION 4. This Resolution shall become effective immediately upon passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF THE
COLONY, TEXAS, THIS THE 7TH DAY OF JULY 2026 ^
Z/'' '•�� : Richard Boyer,eny,
r
City of The CoTexas
ATTEST:
Ana Alvarado, Deputy City Secretary
APPROVED AS TO FORM:
Jeffrey L.'Mgore, City Attorney
Exhibit A
[Amended Purchasing Policy Manual]
PURCHASING
POLICY
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056.972-624-3140
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Policy Number and Title:
Policv Section and Chapter:
Policy Type:
Last Revision Date:
Purchasing Policies, Objectives and Ethics
100.07 Purchasi
Finance — Purchasing
Policv with Admin Procedures
07/07/2026
The purpose of this policy is to establish standard practices and procedures to create an efficient and
effective purchasing program for the City of The Colony. Purchasing is activity which obtains needed
goods or services and replenishes supplies. Purchasing starts with some recognition of needs for goods
and services. The policy and procedures governing the purchasing and accounting of the goods and
services of a municipality can be numerous and often complex. The reason for this policy is to provide
staff with a guide to what to do in all purchasing situations they are most likely to encounter. It is then
the responsibility of the Purchasing Manager to obtain the best value for goods and services in the
proper quantity, at the most economical price.
This policy will point out what basic policies are best suited for the needs of the City of The Colony.
From time to time, there will be changes necessary and as they occur, and updated in this manual. The
policy intended to promote the best interest of the citizens of the City of The Colony. It is important to
remember City purchasing operates in full view of the public. Its purpose to provide guidance and
instruction for all employees new to the purchasing process, as well as a reference for staff and
management.
City of The Colony intends to maintain a cost-effective purchasing system conforming to good
management practices. To be successful, the system must be backed by proper attitudes and
cooperation of not only every department head and official, but also every supervisor and employee of
the City of The Colony. The establishment and maintenance of a good purchasing system is possible
only through cooperative effort.
The purchasing process is not instantaneous. Time is required to complete the steps required by
Federal and State law and City policy. In order to accomplish the timely purchase of products and
services at the least cost to the City of The Colony, all departments must cooperate fully. Prior planning
and timely submission of requisitions is essential to expedite the purchasing process and to ensure that
the process is orderly and lawful.
I. Policy
A. Purchasing reports through Finance Department.
B. The Colony City Purchasing Policies are structured around the Texas Local
Government Code, specifically Title 8, Chapters 252 and 271.
C. Public employment is a public trust. It is the policy of the City of The Colony to promote
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056.972-624-3145
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and balance the objective of protecting government integrity and the objective of
facilitating the recruitment and retention of personnel needed by the City of The Colony.
Such a policy is implemented by prescribing essential standards of ethical conduct without
creating unnecessary obstacles to entering public service.
D. Public employees must discharge their duties impartially to ensure fair and competitive
access to governmental Purchasing by responsible contractors. Moreover, they should
conduct themselves in such a manner as to foster public confidence in the integrity of the
City of The Colony Purchasing organization.
To achieve the purpose of this policy, it is essential those doing business with the City also
observe the ethical standards prescribed herein.
11. Purchasing Objectives
The primary objective of the Purchasing Department of the City of The Colony is to support the City's
staff in accomplishing the goals and directives established by the City Council and the City Manager.
The Purchasing Manager will comply with all legal and ethical standards in obtaining the specified
quality and quantity of materials and services for the City. The Purchasing Manager will promote
fair and open competition for the Purchasing of all goods and services in accordance with all State
and local laws, policies, and regulations.
■ To conduct all purchasing accordance with State of Texas law, including Chapters 252 and
271 of the Texas Local Government Code and be responsible for obtaining the lowest
possible price and highest quality consistent with delivery terms and vendor service
reputation.
To approve and process purchase orders and contracts in a timely manner in response to
requisitions and to prepare, receive, distribute and evaluate requests for bids on a routine
basis. Purchasing also prepares bid tabulations and evaluates the bid packet before posting.
Departments prepare (purchasing can assist with preparing), the recommendation to the
City Manager/City Council.
• Purchasing stimulates competitive bidding in order to obtain materials and services at the
lowest possible cost, and to provide all interested vendors with an opportunity to offer their
products to the City.
• Purchasing promotes good vendor relations and assists establishing specifications which will
encourage competition and accurately describe the equipment and materials needed.
Purchasing also consolidates purchase requisitions, when possible, to take advantage of
quantity discounts and maintains continuity of supply to support on-going services,
operations, and construction schedules. Purchasing ensures the proper disposition of City
surplus.
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III. Purchasing Ethics
All City Staff engaged in Purchasing for the City of The Colony shall comply with the following
ethical standards:
• Personal Ethics
It shall be a breach of ethics to attempt to realize personal gain through public
employment with the City by any conduct inconsistent with the proper discharge of the
employee's duties.
■ Influence of a Public Employe
It shall be a breach of ethics to attempt to influence any public employee of the City to
breach the standards of ethical conduct set forth in this code.
• Conflict of Interest
It shall be a breach of ethics for any employee of the City to participate directly or
indirectly in Purchasing when the employee knows:
• The employee or any member of the employee's immediate family has a
financial interest pertaining to the Purchasing.
• A business or organization in which the employee, or any member of the
employee's immediate family, has a financial interest pertaining to the
Purchasing; or
• Any other person, business or organization with which the employee or any
member of the employee's immediate family is negotiating or has an
arrangement concerning prospective employment is involved in the Purchasing.
• Gratuities
It shall be a breach of ethics to offer, give or agree to give any employee or former
employee of the City, or for any employee or former employee of the City to solicit,
demand, accept or agree to accept from another person, gratuity. It is also a breach of
ethics to accept an offer of employment in contingent with any decision, approval,
disapproval, recommendation, preparation of any part of a program requirement or
purchase request. Influencing the content of any specification or Purchasing standard,
rendering advice, investigation, auditing or in any other advisory capacity in any
proceeding or application, request for ruling, determination, claim or controversy, or
other particular matter pertaining to any program requirement or a contract or
subcontract or to any solicitation or proposal therefore pending before the local
government is prohibited.
• Kickbacks
It shall be a breach of ethics for any payment, gratuity or offer of employment to be made by
or on behalf of a subcontractor under a contract to the prime contractor or higher tier
City of The Colony Finance Department
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subcontractor for any contract for the City, or any person associated therewith, as an inducement for
the award of a subcontract or order.
• Contract Clause
The prohibition against gratuities and kickbacks prescribed above shall be conspicuously set
forth in every contract and solicitation.
Confidential Information
It shall be a breach of ethics for any employee or former employee of the City knowingly to
use confidential information for actual or anticipated personal gain, or for the actual or
anticipated gain of any person.
Purchase of Materials Equipment, and Supplies for Personal Use
Unless specifically approved in writing by the City Manager or Designee, no employee may
purchase City property for their own personal use unless it is purchased through the City's
public auction or through the sealed bid process of the City. This includes new and used
equipment, materials or supplies.
■ Private Purchases Through City Facilities
No employee may use the purchasing power of the City of The Colony to make private
purchases. In addition, employees should not have private purchases sent to the City C.O.D.
to be paid for by the employee.
IV. Federal and State Purchasing Requirements
Tax Exempt Status
The City of The Colony is exempt from Federal, State and local taxes except in certain
prescribed cases. An exemption certificate is available from the Purchasing Department
and be furnished to any of tile City's suppliers upon request.
Certificate of Interested Parties
Section 2252.908 of the Government Code applies to all contracts entered into on or after
January 1, 2016, and states that a governmental entity may not enter into certain contracts
with a business entity unless the business entity submits a disclosure of interested parties
to the governmental entity at the time the business entity submits the signed contract to
the governmental entity. The law applies to all contracts/purchases of a governmental
entity that require an action or vote by the governing body of the entity.
Conflict of Interest Questionnaire
Chapter 176 of the Texas Local Government Code requires any person doing business or
seeking to do business with a government entity to file a Conflict of Interest Questionnaire
form if that person has an employment or business relationship with an employee or officer
of the City. The form must be filed with Purchasing within seven days of the person
becoming aware of the conflict.
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6053 Main Street, The Colony, TX 75056 • 972-624-3145
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PROHIBITION OF BOYCOTT OF ENERGY COMPANIES:
By accepting this contract or purchase order, Vendor verifies that is does not Boycott
Energy Companies and agree that during the term of this Agreement will not Boycott
Energy Companies as that term is defined in Texas Government Code Section 809.001,
as amended. This section does not apply if Professional (or Contractor) is a sole
proprietor, a non-profit entity, or a governmental entity; and only applies if: (i)
Professional (or Contractor) has ten (10) or more full-time employees and (ii) this
Agreement has a value of $100,000.00 or more to be paid under the terms of this
Agreement.
PROHIBIT ON OF DISCRIMINATION AGAINST FIREARM ENTITIES AND FIREARM TRADE
ASSOCIATIONS:
By accepting this contract or purchase order, Vendor verifies that it does not have a
practice, policy, guidance, or directive that discriminates against a firearm entity or
firearm trade association; and (ii) will not discriminate during the term of the contract
against a firearm entity or firearm trade association. This section only applies if: (i)
Professional (or Contractor) has ten (10) or more fulltime employees and (ii) this
Agreement has a value of $100,000.00 or more to be paid under the terms of this
Agreement; and does not apply: (i) if Professional (or Contractor) is a sole proprietor,
a non-profit entity, or a governmental entity; (ii) to a contract with a sole -source
provider; or (iii) to a contract for which none of the bids from a company were able to
provide the required certification.
PROHIBITION OF BOYCOTT OF ISRAEL AND OF DOING BUSINESS WITH CERTAIN ENTITIES:
By accepting this contract or purchase order, Vendor verifies that his/her company,
under the provisions of Subtitle F, Title 10, Government Code Chapter 2270 and
Subchapter F, Government Code Chapter 2252:
1. Does not boycott Israel currently; and
2. Will not boycott Israel during the term of the contract the above-named
Company, business or individual with the City of The Colony, Texas; and
3. Does not do business with Iran, Sudan, or a Foreign Terrorist Organization.
Pursuant to Section 2270.001 Texas Government Code:
1. "Boycott Israel" means refusing to deal with, terminating business activities
with, or otherwise taking any action that is intended to penalize, inflict
economic harm on, or limit commercial relations specifically with Israel, or with
a person or entity doing business in Israel or in an Israeli- controlled territory,
but does not include an action made for ordinary business purposes; and
2. "Company" means a for-profit sole proprietorship, organization, association,
corporation, partnership, joint venture, limited partnership, limited liability
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partnership, or any limited liability company, including a wholly owned
subsidiary, majority-owned subsidiary, parent company or affiliate of those
entities or business associations that exist to make a profit.
Pursuant to Section 2252.151, Texas Government Code:
"Foreign terrorist organization" means an organization designated as a foreign terrorist
organization by the United States secretary of state as authorized by 8 U.S.C. Section
1189.
V. Glossary of Terms
The following definitions are intended to assist employees in understanding the language used throughout
this manual. Contact the Purchasing Department for clarification or if something is not defined in this
section.
Annual Contract - A contract which protects pricing for a set time period (typically one (1) year) and is
awarded to a contractor for goods and services routinely required on a recurring basis. User departments
place orders directly with the contractor, eliminating requisitions and processing times.
Award - The presentation of a purchase agreement or contract to the selected bidder.
Best Value - If the sealed competitive bidding requirement applies to the contract for goods or services, the
contract may be awarded to the lowest responsible bidder or to the bidder who provides the goods or
services at the best value for the City. In determining the best value for the City. Factors used to determine
"best value" include:
• The purchase price;
• The reputation of the bidder and of the bidder's goods or services;
• The quality of the bidder's goods or services;
• The extent to which the goods or services meet the City's needs;
• The bidder's past relationship with the City;
• The impact on the ability of the City to comply with laws and rules relating to contracting with
historically underutilized businesses and non-profit organizations employing persons with disabilities;
• The total long-term cost to the Cityto acquire the bidder's goods or services;
• Any relevant criteria specifically listed in the request for bids or proposals.
Bid - An offer or contract with the City submitted by a bidder in response to an invitation to bid or to a multi-
step bid. The complete bid document referred to as "the bid."
Bid Advertisement - For expenditures of $$100,000 or more a public notice shall be placed in a newspaper
of general circulation and published at least once a weekfortwo consecutive weeks. The notice shall contain
the time and place at which bids will be publicly opened.
Bonds:
Bid Bond - A deposit required of bidders to protect the City if a low bidder withdraws its bid following
submission orfails to enter into a contract following award. Acceptable forms of bid deposits are limited
to bid bond from a surety company authorized to do business in the State of Texas as a guarantee the
City of The Colony Finance Department
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bidder will enter into a contract and execute the required Bonds after notice of award. If the solicitation
requires a Bid Bond, the bid packet will provide instructions when to submit.
Payment Bond -A surety bond ensures all suppliers and subcontractors of the contractorwill be paid for
work and materials supplied in the course of the contract. If the solicitation requires a Payment Bond, it
must be submitted by the contractor after the award and prior to commencement of work.
Performance Bond - A surety bond provides assurance to the City that the awarded contractor will
faithfully perform the work in accordance with the plans, specifications, and contract documents. If the
solicitation requires a Performance Bond, it must be submitted bythe contract after award and prior to
commencement of work.
Maintenance Bond - A surety bond guarantees the project against defective workmanship and
materials duringthe maintenance period set forth in the bond. If the solicitation requires a Maintenance
Bond, it must be submitted by the contractor after award and prior to commencement of work.
Capital Equipment - Assets used in operations with a useful life greater than one year and valued at $5,000
or more at the time of acquisition report to Finance/Purchasing.
Change Order - A change order is issued to a purchase order or contract if changes in plans or specifications
are necessary after the performance of the contract has begun or if it is necessary to decrease or increase
the quantity of work to be performed or of materials, equipment or supplies to be furnished. Local
Government Code 252.048 states original contract price may not be increased under this section by more
than 25 percent. The original contract price may not be decreased under this section by more than 25
percent without the consent of the contractor.
City Council - The elected officials of the City of The Colony, Texas given the authority to exercise such
powers and jurisdiction of all City business as conferred by the City Charter and State of Texas Constitution
and laws.
Competitive Bidding- The process wherein a vendor openly competes with other vendors through a formal
or informal process for the City's business.
Component Purchases - Purchases of component parts of an item, which in normal purchasing practices
would be purchased in one purchase.
Consulting Services - The service of studying or advising the City under a contract does not involve the
traditional relationship between employer and employee.
Contract - An agreement between the City and a contractor, with binding legal and moral force, usually
exchanging goods or services for money or other considerations.
Delivery Date - The date by which goods and services needed by the department or promised by the vendor.
Emergency Purchases - Purchases are made to meet a critical, unforeseen need of the City, where the City's
ability to serve the public would be impaired if the purchase is not made immediately. Emergency purchases
are exempt from standard purchasing procedures and must qualify for an exemption as outlined in the Texas
Local Government Code Sec. 252.022. Emergency purchases must follow the procedure set forth in this
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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manual.
Free On Board ("FOB") Destination Point- Vendor pays freight charges to the destination; title to goods
passed to buyer at receiving dock; freight claims must be filed and handled by the seller.
FOB Shipping Point- City must pick up goods at the seller's shipping dock or pay freight charges; freight
charges may be prepaid and added to the invoice; title to goods passes to the City at the shipping dock of
the seller; freight claims must be filed and handled by the City.
Goods - Property purchased by the City, including equipment, supplies, materials, components, and repair
parts.
Interlocal Agreement - An agreement made between the City and another governmental entity or
cooperative organization to perform governmental functions and services (e.g. purchasing) for each other
as provided under Texas Government Code Sec. 791.025 and Texas Local Government Code Sec. 271.102.
Lowest Responsible Bidder - This is the vendor who offers the lowest bid which meets all the specifications,
requirements, and terms and conditions of the RFB. It is expressly understood the lowest responsible bid
includes any related costs to the City, using a total cost concept. The term "responsible" refers to the financial
and practical ability of the bidder to perform the contract, also used to refer to the experience and safety
of the vendor.
Maintenance Agreements - An agreement with equipment manufacturers or authorized service centers for
the upkeep of equipment neither adds to its permanent value nor prolongs its intended life appreciably but
instead keeps it in an efficient operating condition.
Professional Services - Services rendered by members of a recognized profession as defined by Texas
Government Code Sec. 2254.002 or who possess special skills which are mainly mental or intellectual, rather
than physical or manual. Texas Local Government Code Sec. 252.022(a)(4) exempts professional services
from competitive bidding requirements.
Purchase - An act includes the acquisition of goods or services, including leasing personal or real property.
Separate, sequential, and component purchases are treated as a single purchase.
Purchase Order - A purchaser's written document to a vendor formalizing all the terms and conditions of
a proposed transaction, such as a description of the requested item(s), delivery schedule, terms of payment,
and transportation. When accepted by a vendor, the agreement specified in the purchase order becomes a
contract. A purchase order grants the vendor the authority to deliver the goods or services and invoice for
the same. It is the City's commitment to accept the goods or services and pay for them at the agreed price.
Quote - An informal purchasing process which solicits pricing information from several sources.
Request for Bid ("RFB") - Specifications and a formal written document requesting a firm price and delivery
details for specified goods or services.
Request for Proposals ("RFP") - A formal written document requesting potential vendors make an offer for
goods orservices to the City. The RFP method of purchasing is used for all goods and services. The RFP differs
from an RFB in the City is seeking a solution, as described in the document, not a bid or quotation meeting
City of The Colony Finance Department
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firm specifications. Proposals evaluated based on criteria formulated around the most important feature of
a product orservice, of which quality, testing, references, availability or capability may be overriding factors,
and price is not the sole factor of the award. RFP submittals kept confidential during negotiations until an
awarded contract.
Request for Qualifications ("RFQ") - A formal written document used when soliciting providers of
professional services such as architectural, engineering, or land surveying services. The City must comply
with Texas Government Code Sec. 2254.004 in the Purchasing of these services. The City must first select the
most highly qualified provider on the basis of demonstrated competence and qualifications. After a firm has
been selected based on qualifications and experience, then a fair and reasonable fee shall be negotiated. If
a satisfactory contract cannot be negotiated with the most highly qualified provider of architectural,
engineering, or land surveying services, the City shall formally end negotiations with that firm and select the
next most highly qualified firm and begin negotiations with that providerfor a fair and reasonable price.
Requisition - The source document for all purchasing activity. This form communicates a department's
needs to purchasing and grants authorization to enter into a contractual relationship for delivery other goods
and/or services. A requisition is to communicate internal requirements and not to be used by the
departments for the order and delivery of goods and/or services.
Separate Purchases - Purchases made separately of items in normal purchasing practices would be
purchased in one purchase.
Sequential Purchases - Purchases, made over a period of time, of items in normal purchasing practices
would be purchased in one purchase.
Services - A generic term to include all work or labor performed for the City on an independent contractor
basis, including maintenance, construction, manual, clerical, or professional services.
Sole Source Purchasing - Purchases of goods or services available from only one vendor. There may be just
one vendor because of patents or copyrights, or simply because the vendor is the only supplier for the good
or services. These purchases are exempt from the standard bidding requirements and must qualify as
outlined in Texas Local Government 252.022. Purchases must comply with the procedures outlined in this
manual.
Specifications - A description of the physical or functional characteristics, or of the nature of a supply,
service, or construction item and/or the requirements to be satisfied by a product, material or process
indicating, if appropriate, the procedures to determine whether the requirements are satisfied.
Specifications should be descriptive but not restrictive.
State Contract Purchase - An item available through the State of Texas Purchasing and Support Services
Cooperative Purchasing Program. The State has publicly advertised and received qualified bids for specific
items. These appear on a listing periodically published by the State. The City of The Colony has elected to
participate in the cooperative purchasing program for governmental departments and other state agencies.
Surplus - Item(s) no longer needed by a department, regardless of its value or condition.
Vendor - Ageneric term applied to individuals and companies who provide goods and services to the
City.
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VI. Purchase Request Total Dollar Limits and Approval Requirements
The City Manager as authorized by the City Council of the City of The Colony has delegated to the Purchasing
Manager the authority to procure materials and services for the City of The Colony within the guidelines set
forth by the City Council. In certain cases, the City Manager has also granted this authority to certain City
employees authorized by their Department Directors.
1. Delegation of Purchasing Authority
Department purchasing authority is limited to a single purchase of a total of
$9,999.99 or less. With the exception of some Public Works projects, all other
purchases must be processed through the Purchasing Department.
2. Total Dollar Limits/Approval Requirements to Submit a Purchase
Request
The following standard approval route for all Finance Forms applies to all City
Departments:
CITY OF THE COLONY APPROVAL ROUTING REQUIREMENTS
Dept.
Total Amount
Type of
Responsible
of Request*
Bid/Quote
gid/Quote
Type of
ether Requirements
Required
Approval/s
Required*
$100,000
Sealed
Purchasing
Supervisor
Formal Advertisement
and Above
Department
Sealed Bid (Paper or
Director
Electronic)
Finance -Acct & Budget Ck
Agenda Memo w/Bid
City Manager or Designee
Tabulation
Purchasing Processing
Citv Council Approval
Minimum 31
Purchasing
Supervisor
Email or Electronic
$10,000.00 to
Written
/
Department
Quotation
Quotations
Department
Director
Bid Tabulation
$99,999.99
Finance - Acct & Budget
HUB Check Required
Check
City Manager or Designee
Purchasing Processing
Not
Department
Supervisor
Quotes not required but
<$9,999.99
1 Required
I
I
recommended
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3. Purchases Requiring City Council Approval
Any Purchasing made for $100,000.00 and greater must be approved by the City Council
PRIOR to the purchase being made.
4. Purchases Requiring City Manager Approval
The City Manager or their designee must approve all purchase requisitions for $100,000.00
and up.
5. Purchases Requiring Account & Budgeting Approval
The Finance Director and/or Purchasing Manager must approve all purchase requisitions for
$10,000.00 and up.
*Note* Contractual Agreements — Required for All Services — SEE SECTION XXVI
In accordance with best practices for municipal risk management and to ensure compliance with applicable provisions of
the Texas Local Government Code, contracts are required for all services, regardless of the dollar amount.
This requirement is not based on a financial threshold, but rather reflects the necessity to establish clear terms, manage liability,
and protect the interests of the municipality. No services should commence without a fully executed contract approved in
accordance with local policies and state law.
VII. Purchase Orders
The purchase order authorizes the supplier to ship and invoice for the goods ordered and acts as a
contract between the City and supplier. The primary purpose of the purchase order is to expedite and
control the buying of the City. The major parts of a purchase order which require particular attention
are the following:
• Descrintion- The description must be complete- size, color, catalogue number, part number,
quote date, quote number, cooperative contract number and any information about the
purchase to make sure there is no question as to the material ordered.
• Quantity - The quantity of each item ordered will be stated on the purchase order.
• Unit Price - If at all possible, the unit price will be stated.
• Total - This will be the sum total cost of all items ordered.
• Purpose
The purpose of the Purchase Orders policy is to ensure city employees follow purchasing guidelines when
purchasing needed items for the city operations.
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1. Prohibition on Open Accounts
It is against City Policy to have open accounts with any vendor. Department Orders MUST BE PLACED using
either a City issued Purchasing card or a Purchase Order. To obtain a Purchase Order the department must
first submit a request to Purchasing at purchasing@thecolonytx.gov.
2. Departmental Purchases Under $9,999.99
Any single Purchasing with a total value of not more than $9,999.99 can be made directly by each Department
Director or the Director's authorized representative. Although multiple quotations are not required it is
recommended price comparisons be made, if possible. The departments should look for the best possible
pricing for the City. It is highly recommended the department use a City issued Purchasing card for these
purchases. However, if a Purchasing card cannot be used the department should send a requisition to
Purchasing in orderto obtain a purchase order number. Afully executed contract maybe required if obtaining
services. Contact Purchasing for more information on how to obtain one.
City purchases are audited annually by an outside auditing firm to detect split purchases. Because the
administrative cost of competitive quotations would be more than the amount saved taking such quotations
the competitive bidding procedure does not apply to purchases of $9,999.99 or less.
3. Purchase Orders with City Policy Requirements (purchases between
$10,000.00 and $99,999.99)
Any single purchase with a total value of more than $9,999.99 is subject to all City Purchasing Policies and
Procedures approved by City policy and the City Council. Requirements for items having a single order total
value of $10,000.00 to $99,999.99 must have a requisition created in the City's ERP financial system. The
purchase requisition must be filled out completely and include quantities, complete descriptions of the
item(s) to be purchased, cooperative contract and number, if applicable, quotes date, quotes number and
approved budget funding account numbers to charge for the purchase. Before forwarding the purchase
request to Purchasing, three complete set of quotations (one HUB vendor, if available) and purchase
information must be attached in the requisition for Purchasing to review. At least three written quotes are
required on any purchase with a total between $10,000.00 and$99,999.99. A fully executed contract is
required for services if applicable.
4. Purchase Orders with State Law Requirements (purchases greater than
$100,000.00)
Any single purchase with a total value of $100,000.00 or more is subject to Local Government Code Chapter
252, Chapter 271 and other references. Formal competitive bidding is required in most cases for City
purchases of products or services with a value of $100,000.00 and above. Generally, the term formal
competitive bidding is applied when a solicitation process complies with the Local Government Code. If the
department is recommending an award to a vendor other than the apparent low bidder, the memo must
outline the areas where the low bidder does not possess the full capability to meet all of the requirements
of the contract.
5. Sole Source Purchases
Sole -source purchases are items available from only one source because of patents, copyrights, secret
processes, or natural monopolies as defined by local government code. Purchases available from only one
supplier are exempt from bidding requirements. However, the City requires certification that other
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reasonable sources of supply do not exist.
When a department has identified a specific item with unique features or characteristics essential and
necessary to the requesting department and no alternate products are available, a detailed written
justification must be provided to Purchasing in advance for review and approval.
There are many reasons a purchase might be practical from only one vendor, some examples are:
There is no competitive product. The goods/service are a one -of -a -kind or patented product, a
copyrighted publication available from only one source or a unique item such as artwork. The product is
only available from a regulated or natural monopoly. Examples include utilities, gravel from the only
gravel pit in the area or similar situations.
The product is a component of an existing system only available from one supplier. The replacement of
a component or a repair part may only be available from the original supplier.
Sole -source purchases may also be the result of State law or ordinances require or allow certain types of
purchases made from a particular source:
o Non-profit corporations using workers with disabilities to produce the item. State or local
governments often use products made by blind or workers with disabilities.
o Prison workers produce the item. The state benefits from the sale of these items.
Procedure for Sole -Source Purchases
Sole source purchases handled the same as other purchases, with these exceptions:
• Prior to purchase, the user department must contact Purchasing to determine the best method of
purchasing or sourcing the product.
• If the Purchasing department determines the item is a sole -source purchase, a justification memo must
be attached to the requisition and a current (date must be current and addressed to the City) sole source
letter from the vendor describing how the product or service is a sole source. The sole source letter is
valid for one-year from the date of the sole source letter.
• If there are services associated with the sole source purchase a fully executed contract is required if
applicable.
• Afterthe requisition is approved, the purchase order is prepared.
6. Cooperative/Interlocal Purchasing Procedures
The Government Code and Local Government Code state the City may enter into an Interlocal agreement
with another public entity in the United States for the purposes of pooling resources to obtain favorable
pricing for goods and services. Interlocal Agreement purchases require City Council approval if exceeding
$100,000.00. The City of The Colony has Interlocal agreements with various entities throughout the State of
Texas and is a member of several cooperative purchasing programs throughout the United States. A list of
the current cooperative purchasing programs in which the City participates is available
S:\City_Share\Purchasing\COOPS & Interlocal Agreements
A. Cooperative Purchases
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Cooperative purchasing saves time and effort over competitively bidding our own items and allows us to
combine our purchasing power with other entities to achieve lower prices on various goods and services.
Purchasing has established several cooperative purchasing agreements with many public entities and State
and City Council approved cooperatives. Among them are the Houston -Galveston Area Council of
Governments, (HGAC), Omnia Partners, The Local Government Purchasing Cooperative (Buy Board), TIPS,
Sourcewell, State of Texas, Choice Partners and others. All agreements are established for the purpose of
achieving maximum savings to the City through pooling of economic buying power. A purchase from an
approved cooperative satisfies the requirement for competitive bidding.
Before any department makes any purchase from a cooperative contract, they should contact Purchasing to
ensure appropriate guidelines are being followed.
Prior to making the decision to use a cooperative contract the City shall use one or more of these review
processes:
• Compare the cooperative contracts available for the required product or service, conduct market
research, and evaluate whether the use of a cooperative contract is appropriate.
• Analyze all costs associated with conducting a competitive solicitation and contact the cooperative lead
agency to verify contract application and eligibility.
• Review the cooperative contract for conformance with all applicable laws and best practices.
• Analyze the product or service specifications, price, terms and conditions and other factors such as: cost
to utilize the contract, shipping, minimum spend requirements, and availability of contract
documentation, to ensure the cooperative contract produces best value.
Through cooperative purchasing, the City can save time and money. Cooperative purchasing occurs when
two or more entities (state, federal or local governments) coordinate some or all of their purchasing efforts
to the mutual benefit of all participants in the purchasing process.
The Purchasing Department shall take advantage of the following types of cooperative purchases when
deemed to be in the City's best interest:
• Interlocal Agreement Purchases
• State Contracts
• Piggybacking
• Joint Purchases
There are a number of levels of cooperative purchasing, from occasional minor cooperation in a purchase, to
a level where all purchases done through the cooperation of two or more cities called Interlocal Agreements.
There are also several types of cooperative purchases, ranging from one city "riding" on the contract of
another city to splitting the purchasing duties equally.
Cooperative purchasing accomplished through several methods. The first method involves one city
performing all the tasks necessary to make a purchase with other governments purchasing off the first city's
contract. A second method involves cities sharing the purchasing responsibilities. Following are the most
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commonly used types of cooperative purchasing:
A. Piggybacking
In piggybacking, one city creates a contract and allows other governments to use it. Both governments should
protect themselves by establishing an agreement in writing, even when the arrangement is informal. The
agreement should specify the duties and responsibilities of each party. There must be a clause in the contract
about this agreement and vendors must agree to it.
B. Joint Purchases
Two or more cities join to purchase one or more goods or services jointly. This may involve each city handling
part of the administrative shores or agreeing to have one of the cities handling the transactions under the
guidance of the others. If the arrangement is long-term, rotate the roles periodically to share equally the
purchasing duties. All parties to a purchase must agree to the specifications, so that a mutually satisfactory
good or service is ordered.
C. Buying from State Contracts
Under the provisions of Local Government Code Sections 271.081 - 271.083, the Comptroller of Public
Accounts offers the Cooperative Purchasing Program and manages state contracts. Buying from state
contracts is a form of piggybacking. Under this program, and after complying with certain requirements, a
local government may participate in all automated state contracts.
B. Interlocal Cooperative Purchasing Agreements
The Local Government Code Section 271.102, Cooperative Purchasing Program Participation and current
purchasing laws allow the City to utilize another local government of this state or another state or with a
local cooperative organization of this state or another state contracts granted through a competitive process
via use of Interlocal Cooperative Purchasing Agreements. These contracts are used as another tool in
accomplishing our mission to our citizens. They are never used to intentionally and knowingly avoid our
competitive bid process. Any use of another entity's contract for Purchasing of goods/services must be
discussed with Purchasing in advance of acquiring quotes.
The following conditions must exist before the purchase can move forward:
• The City has a valid pre-existing Interlocal Cooperative Purchasing Agreement with the other city.
• The item(s) wishing to be purchased are covered under the contract as originally written, not amended
specifically for the City of The Colony's needs.
"Published Options" if called for in the original contract, and specifically priced on the contract, are allowable.
If special needs by the City are not covered by the contract pricing or published options, City optional
additions ("unpublished options") allowed as a Change Order, as long as they are specifically outlined on the
order.
C. Cooperative Purchasing Order Processing
The following is an overview of the ordering processes for various cooperative purchasing programs. This
process is provided for purchases utilizing other cooperative purchasing program contracts, such as
Department of Information Resources (DIR), Texas Multiple Award Schedule (TxMAS), Houston -Galveston
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Area Council (HGAC), The Interlocal Purchasing System (TIPS), Buy Board and others.
• The requesting department obtains a quote from a contracted vendor. The itemized quote is in
accordance with the contract terms, and the quote contains the contract number. The quote must
reflect base price, published options, and unpublished options, as applicable. The quote reviewed by
Purchasing and sent to the original entity to verify compliance with the existing contract with the
vendor.
• The Department will verify contract and pricing prior to submitting the quote to the buyer for
approval and submitting a requisition to Purchasing.
• The requesting department should attach the quote when submitting the requisition for review by
Purchasing.
• Purchasing reviews and verifies the contract and pricing of the quote.
• A fully executed contract is required for services if applicable.
Upon purchasing approval, an agenda memo for purchases in excess of $100,000.00 is created
and reviewed by Purchasing and the department.
6. Purchasing will submit a purchase order accordingly. HGAC, Buy Board and TIPS purchase orders
submitted to the cooperative directly for order confirmation. The purchase order reviewed by the
cooperative and the order submitted directly to the vendor for processing. Purchasing processes all
purchase orders to the cooperative regardless of dollar threshold.
D. Emergency Purchases
The purchase must qualify as an emergency purchase as defined in Local Government Code Chapters 252
and 271. If there is time to give proper notice and for an advertisement to be made, then it is not an
emergency situation. Generally, three broad areas can be classified as emergency purchases:
When a public calamity such as a hurricane or other tragedy, if it is necessary to make a purchase
promptly to relieve the necessity of the citizens or to preserve the property of the City, the purchase is
exempt from the competitive bidding requirements.
+ The same is true in the case of an item necessary to preserve or protect the public health or safety of the
residents of the City's jurisdiction or an item necessary because of unforeseen damage to public property.
When it is necessary to preserve or protect the public heath, competitive bidding requirements waived
regardless of how the conditions were brought about. State courts have said that the words "preserve"
and "protect," as applied to public health, carry the idea of timely, efficient and effective action that
keeps intact and unimpaired the good health of the citizens in advance of impairment. It is not necessary
for the public health to be under immediate peril because of a public calamity before the bid exemption
is put aside. In this case, the court approved repairs and improvements to a city's sewer system that were
made without advertising for competitive bids.
Procedures for Placing an Emergency Order During Normal Working Hours
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Emergency purchases are those purchases over $10,000.00 made during or after normal working hours to
keep equipment or machinery in operation or to avoid work stoppage. The initiating department notifies
purchasing office by email or telephone immediately with as much information as possible about the
emergency purchase required. A purchasing requisition is prepared by purchasing.
Purchasing or initiating department head contacts as many vendors as necessary to arrange the emergency
purchase. If there is not enough time to get authorization, the purchase can be completed by telephone, and
the purchase order is completed after the fact and delivered to the vendor. Expedited delivery is requested.
The person making the requisition may be required to pick up the emergency purchase from the vendor if
timely delivery is not available.
Placing an Emergency Order During Evenings, Weekends and Holidays
When purchasing personnel are unavailable, process emergency purchases as follows:
• The affected department takes whatever steps are necessary to procure needed supplies, services or
equipment to relieve the emergency. If possible, only those goods or services needed during the
evening, weekend or holiday are procured.
• On the first working day following the emergency, the person making the purchase must attach the
invoices, bills of materials, receipts or other documents related to the purchase of the requisition
and send it to purchasing.
• The person in charge of the affected department must certify in writing on the next business day, or
as soon as possible, why the purchase was necessary.
• The Department Director ortheir designee must approve all emergency purchases for $10,000.00 and
higher. When approved, a purchase order number is issued by purchasing to cover the purchase. The
purchase requisition must contain all information (quantities, descriptions, unit pricing, total pricing,
and budget account numbers). The purchase request MUST NOTE the request was an emergency.
In the event of a true public calamity or declared emergency, the Emergency Purchasing Policy will be the
policy of record during the declared emergency.
NATIONAL AND REGIONAL COOPERATIVE PROGRAMS LISTING 10-1-2023
Buy Board GSA
https://www.buvboard.com
Choice Partners
https://www.choicepartners.org/
Omnia H -GAC
https://www.omniapartners.com
NPPGov
https://nppgov.com/
NCTCOG—TxShare
https:ZZtxshare.org/
PACE
https:ar)ace.esc20.net1
Pavillion
httpsa/www.withpavilion.com
Sourcewell
https://www.sourcewell-mn.gov/node/243921
Texas Smart Buy
https://www.txsmartbuy.com/
Texas DIR
htt s:
dor.texas. ov
TIPS -USA
https:llwww.tips-usa.com/vlist.cfm
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New interlocal agreements and city piggyback contracts added as needed and may be located at Shared S
Drive > City Share > Purchasing > COOPs & Interlocal Agreement folder.
III. City Annual Price Agreements/Contracts
The City has established through the competitive bidding process several annual price agreements with
various vendors on a wide variety of products that allow departments to purchase items without having to
go through an additional competitive bidding procedure. These contracts provide the following benefits:
• Lower administrative costs due to placing one annual order rather than several smaller orders
• Pricing that remains firm, for the contract period.
• A wide range of products available at lower costs
Items purchase through the City contracts may be purchased directly from the vendor. All vendors, items and
pricing under contract are available from purchasing.
• Annual Contracts (Blanket)
Annual Agreement - issued by the Purchasing Department to create an annual agreement between the City
and a vendor for specific items and/or services provided at a certain price, on an as -needed basis. Annual
agreements do not encumber funds until a release against the blanket order is issued. Annual agreements
normally are issued following a bid award by the City Council where the annual expenditure is expected to
exceed $100,000.00. An annual agreement may be for the exclusive use of an individual
operating department, split between operating departments or may be established for citywide use.
After an annual contract been awarded, purchasing will issue an annual contract and Purchase Order to the
vendor awarded the contract. The Purchase Order will also show the account number or numbers funds will
be drawn from to pay for the merchandise or service received. All invoices received from the annual contract
must display the purchase order number issued to the vendor.
• Cancellation of Purchase Orders
Purchase Orders may be cancelled by an email or memorandum forwarded to the Purchasing Manager
justifying the cancellation.
Change Orders
Change Orders are documents modifying information concerning goods and/or services, price, and/or
quantities in an existing contract/purchase order. If the total amount of the contract/purchase order is
increased by the change order, the change order may require approval by a different authority than that used
to approve the contract/purchase order and/or previous change orders. Local Government Code
252.048 states original contract price may not be increased under this section by more than 25 percent. The
original contract price may not be decreased under this section by more than 25 percent without the consent
of the contractor.
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VIII. Purchase Orders (after the fact)
This type of purchase occurs when the using department received goods or services over$10,000.00 without
obtaining a purchase order prior to the transaction. Purchasing will issue a Purchase Order for this type of
purchase. If it is not an emergency (see Emergency Purchases), this purchase may violate policies, and
Purchasing would need additional information to issue a Purchase Order. In order for an invoice to be
processed and paid, the using department must receive approval for payment from the Department Director
or their designee using the "After the Fact" form created by Purchasing
IX. Purchasing Card Policy (P -Cards)
The purpose of the City of The Colony's Purchasing Card Program is to establish a more efficient,
cost-effective method of purchasing and paying for small dollar transactions as well as high-volume,
repetitive purchases. The goal of the program is to reduce internal purchasing restrictions to the
administrative costs associated with processing small purchases under $9,999.99. The program is
not intended to bypass appropriate purchasing or payment procedures. The intent of the program
is to complement the existing purchasing program and must be used in conjunction with the City's
Purchasing Policies. This policy is effective for the City's MasterCard Program.
How the program benefits cardholders as well as the City:
• Allows cardholders to obtain goods and services faster and easier
• Allows all groups and individuals involved in the program to be more effective and to focus
on the value-added aspects of their jobs
Why cardholders have been selected to receive a Purchasing card:
• Job responsibilities require them to purchase certain types of goods or services
• Part-time employees will not be issued Purchasing cards unless approved by the City Manager
or Designee.
The City's policies and procedures governing the use of the Purchasing card:
• Transaction and monthly credit limits
• Types of purchases are set within the parameters of the Purchasing card while ordering goods
and services from vendors
• Handling credits, returns, and disputes
• Cardholders' responsibilities concerning monthly review and reconciliations
Obtaining a Purchasing card:
• The Department Supervisor or equivalent will submit a new Purchasing card request form
found S Drive> City Share> Purchasing for each Purchasing card request for processing.
• The Department Directorwill approve the request
• The Purchasing Manager will coordinate with JP Morgan Chase for P -card issuance
• The card(s) will be sent to the Purchasing Manager who will then contact the cardholder(s) for
pick-up and sign the CARDHOLDER CREDIT CARD AGREEMENT
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After signing the Cardholder's Agreement, the employees will then be authorized to use the
Purchasing card.
To change a cardholder's limits, an increase/decrease form will be required and email to the Finance
Director and Purchasing Manager providing detailed information regarding the need for any change
and the purpose for requested amount of change is required. The Finance Director and/or Purchasing
Manager can make the determination regarding any change.
The card will have the cardholders' name, City's Tax ID# and City Name embossed on it.
JP Morgan Chase Bank
First, contact Purchasing to resolve any credit card issues.
The Purchasing card program is serviced through JP Morgan Chase Bank. The Customer Service Center
is available 24 hours a day, 7 days a week to assist the cardholder with general questions about the
Purchasing card account. The customer service number is:
1-800-316-6056.
If a Purchasing card is lost, stolen or has non -valid transactions, immediately contact Purchasing at
purchasing@thecolonytx.gov. Prompt action can reduce the City's liability of fraudulent activity
• Purchasing card activation
Purchasing will activate the Purchasing card before contacting requesting individual. Purchasing will
assign the four digit pin when requesting the P -Card. This pin is not required when making purchases, it is
a security protection. Upon receipt the cardholder should sign the back of the card and keep the card
in a secure place.
■ Documentation and Approval Process
The Purchasing card is issued in the employee's name. All purchases made with the Purchasing card must
be for the designated employee's Department only. Exceptions for The Finance and IT departments.
• Approval Process - Cardholders designated by their Department Director to use the
Purchasing card. Cardholders are responsible for following the guidelines provided by the City
regarding purchases, selection of vendors, security of the card, and monthly reconciliation of the
charges and coding of charges to the appropriate accounts. It is the cardholder's responsibility to
obtain itemized transaction receipts from the merchant orsupplier each time the Purchasing card
is used. Receipts must be completely legible.
Purchases made with a Purchasing card are funded by taxpayer dollars.
Ownership of a City Purchasing card is a privilege and NOT a right.
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Cardholders are charged with making responsible, work-related purchases and with the prompt and
complete submission of monthly card reconciliation documents through the Payment Authorization
process.
Cardholders who fail to meet these responsibilities will have their Purchasing card privileges revoked.
Inappropriate purchasing card use will result in disciplinary action.
Purchases Prohibited with the Purchasing Card
The Purchasing card is not for personal use. City policy also prohibits loaning the Purchasing cards to any
other person or employee (other than additional approved departmental employees, in the case of a
departmental card). The Purchasing card not intended to avoid or bypass appropriate purchasing or
payment procedures. Cardholders shall not separate or split purchases to avoid the normal purchasing
procedures. Any purchase over $9,999.99 shall go through the requisition process and adhere to purchasing
guidelines. This program complements the existing processes available.
Itemized receipts are required documentation for completion of transactions and supporting
documentation. Lost or missing receipts must have department head approval.
Separate Purchases - Purchases made separately of items in normal purchasing practices, would be
purchased in one transaction.
Sequential Purchases - Purchases made over a period of time, of items in normal purchasing practices,
would be purchased in one transaction.
EXAMPLES OF PROHIBITED PURCHASES WITH CREDIT CARD
• Purchases of technology items except by the Information Technology Department.
• Employees who receive a monthly phone allowance cannot use the Purchasing card for any phone
accessory purchases, including but not limited to, cases, apps, etc. The monthly allowance is intended
to cover those items.
• Employees who receive an automobile allowance, cannot use the Purchasing card for gas or other items
for their personal vehicle. This is covered by the automobile allowance.
• Gift cards for employees should never be purchased with the P -card or any other payment
method unless authorized by the City Manager.
• Gift cards for giveaways or for non -employees are allowed as long as they are approved by City Manager
Office (CMO) in advance.
• Cash Advances
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Gifts for employees including but not limited to Christmas or other holidays or celebrations are
prohibited with City funds except when:
• Approved in advance by City Manager Office
• Infrequent in nature
• Non-cash items and
• Alcohol and tobacco purchases (except for CMO, CVB and Economic Development)
• Gratuities in excess of 20% unless approved by the department head.
• Retirement gifts are permitted under $100.
• Tips not added to gift card or to food purchases.
• Payment for Services (e.g., repairs, consulting, maintenance): P -Cards may not be used to pay for
services due to liability concerns and the potential need for a fully executed contract. Services often
require detailed terms, insurance provisions, and risk mitigation that can only be addressed through a
formal agreement approved by the City. All service -related purchases must go through the standard
procurement process.
k. Credit cards are not kept on file with a vendor under any circumstances.
E. Mobile Payment Applications: Mobile payment applications and digital wallets may be used for
authorized City business purchases when they provide adequate transaction documentation and
itemized receipts. Applications commonly used for business travel and operations, such as Uber, Lyft,
Apple Pay, Google Pay, Samsung Pay, and PayPal, are permitted. Peer-to-peer payment services used
to transfer funds directly to individuals, including but not limited to Venmo, Cash App, PayPal Friends
and Family, are prohibited unless specifically approved by the City Manager. Cardholders are
responsible for maintaining documentation supporting the business purpose of all transactions.
Storage of Purchasing Card Information: Purchasing Card information may be stored on a personal
mobile device only within approved applications used for authorized City business purposes, such as
business travel, lodging, or transportation. The Purchasing Card shall not be stored in personal
payment transfer applications, personal shopping accounts, or any application used primarily for
personal transactions. Cardholders are responsible for safeguarding card information and ensuring
compliance with all City purchasing policies.
• Staffing Responsibilities
• Program Administrator- (Purchasing Administrator)
The Program Administrator for the City of The Colony is the Purchasing Administrator under the
supervision of the Purchasing Manager. The Program Administrator has been designated by the City to
answer questions, resolve problems and administer the program. This person will be knowledgeable on
all procedures in the Cardholder User's Guide. All Purchasing card requests to JP Morgan Chase Bank
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must go through the Program Administrator. The Purchasing card must be returned to the Purchasing
Department upon termination. If the employee is transferred to another department, the site
administrator shall contact the Program Administrator to update the employee's information.
• Department Directors
The Department Director or equivalent, is responsible for designating all cardholders within the
department, departmental cardholder and is responsible for approving the cardholder's monthly
purchasing card statements to ensure they adhere to the City's policies. Purchases in excess of
$10,000.00 must adhere to the PO process as detailed in the Purchasing Policy.
+ Purchasing Card Controls
• Single Purchase Limits
A Single Purchase Limit (SPL) is the amount available on the Purchasing card for a single transaction. The
SPL for most cards is $3,000. A transaction includes the purchase price, plus tax (if any) and freight.
Purchases exceeding the cardholder's Single Purchase Limit will be declined. The City prohibits the use
of repetitive transactions intended to circumvent the Single Purchase Limit. Card purchases audited to
identify such transactions. Changes to the Single Purchase Limit by submitting P -Card increase/decrease
form with proper authorization signature, processed through the Purchasing Manager.
SPLIT PURCHASES IN ORDER TO AVOID THE LIMIT ARE STRICTLY PROHIBITED.
• Monthly Purchase Limits
The Monthly Purchase Limit on most cards is $10,000 but varies based upon departmental needs
approved by the Finance Director and Purchasing Manager. This is the maximum amount available on
the card per month. Any changes to the Monthly Purchase Limit must be approved by the Departmental
Director and/or Finance Director.
• Restricted Vendors
The purchasing card program may be restricted for use with certain types of vendors and merchants. If
a purchasing card presented for payment to these vendors, the authorization request will be declined.
The City's Purchasing card is NOT to be used for alcohol tobacco or any personal purchases. Alcohol
purchases are acceptable for certain departments as indicated in this policy. Variations from this portion
of the policy must be approved by the Assistant City Manager and/or Finance Director. Any allowable
meal purchases must include a list of names of persons participating in the meal along with the business
purpose associated with the meal.
• Security of the Purchasing Card
The cardholder is responsible for the security of the card and all purchases. City policy prohibits loaning
the purchasing cards to any other employee to make purchases. This card should be treated with the
same level of care as the cardholder would use with his/her own personal charge cards. Guard the
purchasing card account number carefully. Cards should not be left out in the work area or left in a
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conspicuous place. The only person authorized to use the purchasing card and account number is the
cardholder whose name appears on the card or in the case of a departmental card, the user must be
authorized/approved by the Department Director.
• Employee Liability
Employees do not pay their own monthly statement. The program does not affect the individual
employee's credit rating in any way. If the card is accidently used to purchase non -City business goods
and services, notify Program Administrator immediately.
■ Chip and Personal Identification Number ("PIN") Technology
JP Morgan Chase Purchasing cards enabled with chip and PIN technology to help reduce the occurrence
of fraud for in-person transactions. At the time of chip card activation, the program administrator shall
choose a 4 -digit PIN. The PIN shall be kept confidential by the cardholder with the same level of security
the cardholder provides to the PIN on a personal debit card. A cardholder with a chip card who is later
reissued a new chip card, PIN will remain the same unless there has been fraudulent activity and a new
PIN is required. The PIN may not be required on all merchant transactions; however, if prompted, the
cardholder must enter the 4 -digit PIN to complete the transaction.
■ When traveling with the purchasing card please referto the City Travel Policy.
General Cardholder Guidelines
Cardholders should promote and encourage positive interactions with suppliers. Honesty and courtesy are
essential ingredients in all aspects of a buyer/supplier relationship. The City of The Colony promotes the use
of local (The Colony) vendors whenever possible.
All cardholders should follow these guidelines below when using the Purchasing card:
• Determine if the transaction is an acceptable use of the card, and if it is within the cardholder's spending
limit. Justify and defend every purchase. Identify the supplier and call, or visit the supplier to place the
order.
• If the order is by mail, specify cardholder name, company name, department name and shipping
instructions. Also, specify the purchasing card number, expiration date and name as it appears on the
card.
• Inform the vendor the City is tax-exempt. Forward a copy of the tax- exempt form, if requested. Confirm
the pricing and freight. Make sure the combination of both does not exceed the single transaction limit.
• Request a copy of the pricing and freight be emailed or faxed to the cardholder and/or included in the
shipment of supplies. Instruct the vendor not to send a copy of the itemized invoice to accounts payable
to avoid duplicate payments.
• Requestthe supplier indicates the employee's name and the words "Purchasing Card" on all packing lists
and box labels. This will enable the receiving department to facilitate delivery of supplies. Shipments
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without this information may be refused and returned to the vendor.
Returns and Disputed Charges
Should a problem arise with a purchased item, service or charges, the Cardholder should make every
attempt to resolve the issue directly with the supplier. The Cardholder should note all returned, credited,
or disputed items on their expense report.
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A. Returns
If an item needs to be returned to a supplier, the Cardholder must contact the supplier and
obtain instructions for the return. Note some suppliers may charge a restocking or handling fee
for returns. All returns indicated on the monthly p -card statement along with a notation of any
restocking or handling fees.
If the item is accepted as returned by the supplier, a credit for this item should appear on the
following p -card monthly statement.
B. Disputed Charges
■ Supplier Disputed Charges: If a cardholder finds a discrepancy on their statement,
the cardholder should contact the supplier immediately. All disputed items
indicated in the credit card report submitted to Finance.
■ Fraudulent Charges: If a cardholder finds a fraudulent charge on their statement,
the cardholder should first contact JP Morgan Chase Bank immediately. Please
call the number on the back of the card. The bank will ask a series of questions
regarding the fraudulent charge, the bank will open a case and if the charges
proven to be fraudulent the charge(s) will be credited back to the card. After
JPMorgan has been contacted the cardholder shall inform the Program
Administrator of the fraudulent charges. All fraudulent disputed items indicated
in the credit card report.
If a cardholder cannot resolve a disputed item directly with the vendor, the cardholder
should contact JP Morgan Chase Bank at 1- 800-316-6056. The credit card vendor will
place the charge in a "State of Dispute" and the account may be given a provisional credit
until receipt of adequate documentation from the vendor. If the documentation appears
to be in order, the transaction re- posted to the account and the dispute is considered
closed. If the charge is suspected to be fraudulent, the card will be immediately blocked
by JP Morgan Chase Bank, and an investigation of the charge will continue. A new card
re -issued to the cardholder, if appropriate.
Disputed charges must be handled in a timely manner in order to receive a credit. JP
Morgan Chase Bank will not honor or try to help the City dispute transactions to
merchants not reported on the proper form within 45 days of the date of the original
transaction. If the City does not report the dispute within this time period, the City is
responsible for the charge.
Disputed charges processed as follows:
• Once a discrepancy is detected, the cardholder should contact the supplier
and attempt to resolve the problem.
• If the cardholder and merchant can resolve the dispute, a credit is to be
issued and should appear on the next billing cycle statement.
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The cardholder should immediately advise the Program Administrator of the disputed
charge via e-mail.
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Purchasing Card Audits
In addition to reviewing each transaction, the Finance Department conducts audits on all City departments
throughout the fiscal year. The audit process evaluates compliance with the procedures outlined in the
documents provided in this manual.
Records audited in the following areas:
• Completeness of records
• Supporting documentation for each purpose
• Sales tax paid and documentation of collection efforts
Goods
• Documentation of purpose
• If requested, existence of items
• Use of Purchasing cards for prohibited items or at restricted vendors
Travel
• Potential travel items may be crosschecked with accounting to verify expense reports were
completed and sent to Finance
Upon completion of an audit, a written report is completed and sent to the Department Director, Purchasing
Manager, and/or Finance Director. The department shall provide a written response to the audit findings to
the Finance Director. After review by Finance, a final report will be provided to the City Manager's Office.
• Consequences for Card Abuse
Cardholders are to remember that purchases are funded with taxpayer dollars. Therefore, it is imperative
that the City's purchasing card program is above reproach. All transactions MUST BE strictly for work
purposes, and all documentation must be readily available.
Any inappropriate use of the Purchasing card forwarded to the City Manager for disciplinary action up to
and including termination.
Offenses may include but are not limited to:
Late or incomplete reconciliation documents including but not limited to missing itemized receipts, missing
signatures, incomplete information, failure to resolve sales tax, loaning a card and/or PIN numberto another
person, and any other discrepancies within 3 days of notice by the Finance Department.
Outstanding Purchase Card Transactions
All employees will have 10 days to submit purchasing card documentation. It is the responsibility of the
cardholder to complete and forward the forms for approval in a timely basis so Finance can review, approve
and record the transactions in the General Ledger.
If the Purchasing card transactions and approval(s) not submitted for review within 10 days, the card may
be terminated.
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For example, Card statement for November 5` — December 6th was sent to Card Holder on December 7t'
the transaction review and approval must be submitted before December 171h so the card will not be
terminated.
NOTE: Unintentional mistakes resolved prior to the reconciliation process will not be considered as card
misuse.
Cardholders are further cautioned:
In cases of more serious purchasing card abuse, the City may, at its sole discretion, select more severe
disciplinary measures based on the nature of the offense.
The policy outlined in this document does not supersede the Employee Manual or any Administrative orders
related to Purchasing or Ethics.
Purchasing cards may be suspended at any time at the discretion of the Department Director or City
Manager's Office if improper use is suspected.
Sales Tax
City of The Colony is exempt from most sales and use tax as allowed by law. Remind merchants sales tax
should not be included in the transaction. The card does not automatically alert the merchant of the City's
tax-exempt status. Cardholders must tell the merchants at the time of the transaction it is a tax-exempt
purchase, and no tax is added to the sale. Cardholders should check the store receipt before leaving the
store to ensure the sales tax is not included in the total. If added tax is applied to the sale, the cardholder
will have the merchant credit the amount of the tax to the card.
Employees are responsible for ensuring exemption from sales tax. When sales tax is charged on the receipt
in error, it is the responsibility of the Cardholder to obtain a tax credit.
Exceptions: Sales tax on restaurant meals, air travel and parking. The cardholder should seek an exemption
on sales tax at these locations, however, understand the exemption may not be granted. Cardholders should
provide the tax-exempt forms which are available from the Purchasing Manager, before the order is placed. City
employees are not exempt from hotel lodging taxes.
Note: In some special cases, the City is required to pay tax. If there are any doubts about the tax or if the
vendor requires tax to be paid even if they have received the tax-exempt form, contact the Purchasing
Manager for additional instructions.
Examples of Possible Violations
1) A purchase is required that will cost $9,800. The vendor has offered to bill $4,500 on one transaction
and $5,300 on another in order to remain below transaction limits. Is this a violation?
Yes. This is considered splitting a purchase (sequential purchasing) under Local Government Code §252.001
—Separate Purchases, which includes purchases made separately that, in normal practice, would be made
as one procurement. The total cost of the purchase exceeds the City's $10,000 Purchase Order threshold
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and must be processed as a single purchase in accordance with applicable procurement requirements.
Employees must not divide or structure purchases to avoid competitive procurement or approval
thresholds, regardless of intent or vendor suggestion.
2) What if the vendor splits the transaction and I did not know the vendor was going to do it?
Employees are responsible for ensuring compliance with City purchasing policies regardless of intent.
Transactions that result in the circumvention of the City's $10,000 Purchase Order threshold or other
procurement requirements will be reviewed based on the total value of the purchase and may be
deemed a violation.
If an employee knew or reasonably should have known that the total purchase exceeded $10,000, the
purchase should not have been completed using a Purchasing Card and proper procurement procedures
should have been followed in advance. However, if it is determined that a vendor intentionally split
transactions to avoid City purchasing requirements or card controls, the vendor may be subject to corrective
action, up to and including disqualification from doing business with the City in the future.
3) A department needs generators for field operations. They purchase generators totaling $4,500 on
Tuesday. On Wednesday and Thursday, they purchase additional generators totaling $3,200 and $3,100,
respectively. The total cost of the generators is $10,800. Is this a violation?
Yes. These transactions meet the definition of a Sequential Purchase, which is a purchase made over a
period of time that, in normal purchasing practice, should be combined into a single procurement.
Although each individual transaction is below the City's $10,000 Purchase Order threshold, the
aggregate purchase exceeds the threshold and should have been processed as a single procurement.
Employees should understand that regardless of intent, purchases that are artificially divided or made
in a series of transactions to avoid purchasing requirements will be deemed a violation of City policy.
4) Merchandise has been ordered totaling $8,500. At the last minute, changes are deemed necessary
that would raise the total order to $10,300. What should I do?
The purchase should not be completed using the Purchasing Card. Once the total cost exceeds the City's
$10,000 Purchase Order threshold, the department must follow the applicable procurement procedures
and submit a purchase requisition. Any required quotes or competitive procurement requirements must
be obtained in accordance with City policy before the purchase is made.
5) A pump costing $9,500 is required to repair a water leak. The purchase is made, and later that
afternoon it is determined that an additional $1,200 in pipes and valves is needed to complete the
repair. Is this a violation?
No. This is an example of an unforeseen circumstance discovered during the repair process. In certain situations,
additional parts or materials may be required that were not known at the time of the initial purchase.
Cardholders should thoroughly document the circumstances, including why the additional items were necessary,
to demonstrate that the purchases were not intentionally separated to avoid the City's $10,000 Purchase Order
threshold or other procurement requirements. Proper documentation will help reviewers understand the
business need and the reason for the additional purchase. While obtaining hotel reservations, taxes are included
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on the bill. Is this a violation?
No - City employees are not exempt from hotel tax. Hotel tax requires payment.
X. Bid Procedures
The purpose of the City of The Colony Bid Procedure policy is to ensure all purchase made by the City receive
the most cost-effective and quality of product bid possible. Under no circumstances shall multiple
requisitions be used in combination to avoid other applicable bidding requirements or City Council approval.
To kick-off the process fill out the bid information worksheet found S:\City_Share\Purchasing and
coordination between departments and purchasing will begin until final documentation is presented.
• Purchases more than $100,000.00
State law requires a municipality to use sealed competitive bids or competitive proposals for all purchases
over the $100,000.00 limit and advertised at least twice before the bid opening. Bid opening will happen 14
days after the last advertising date. The City of The Colony advertises in the Dallas Morning News. The
requesting department director and purchasing department will jointly write specifications or proposals for
the sealed bid/proposals procedure. When the bid/proposals have been received and reviewed to ensure
compliance with the bid requirements and specifications, the department director will make his/her
recommendation. The recommendation will be presented to the City Council and they will consider
awarding the contract.
The Purchasing Department is responsible for soliciting offers for bid purchases of
$100,000.00 or more and for providing the requesting department with all bid information and tabulations.
Bid packet submitted to purchasing for advertisement processing to Dallas Morning News no later than
4:OOPM Tuesda of the week for advertising.
• Texas Codes Annotated Local Government
• Section 252.062 I. Criminal Penalties
• A municipal officer or employee commits an offense if the officer or employee intentionally or
knowingly makes or authorizes separate, se uenti I r cam onen r hases to avoid the
competitive bidding requirements of Section 252.021. An offense under this subsection is a Class B
misdemeanor.
• A municipal officer or employee commits an offense if the officer or employee intentionally or
knowingly violates Section 252.021, other than by conduct described by Subsection (A). An offense
under this subsection is a Class B misdemeanor.
• A municipal officer or employee commits an offense if the officer or employee intentionally or
knowingly violates this chapter, otherthan by conduct described by Subsection (A) or (B). An offense
under this subsection is a Class C misdemeanor.
■ Section 252.063. Removal; Ineligibility
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The final conviction of a municipal officer or employee for an offense under Section 252.062 (a) or (b) results
in the immediate removal from office or employment of that person. For four years after the date of the
final conviction, the removed officer or employee is ineligible:
• To be a candidate for or to be appointed or elected to a public office in this state.
• To be employed by the municipality with which the person served when the offense occurred, or to
receive any compensation through a contract with that municipality.
• This section does not prohibit the payment of retirement or workers compensation benefits to the
removed officer or employee.
• Section 252.021. Competitive Bidding and Competitive Proposal Requirements
Before a municipality may enter into a contract requires an expenditure of more than $99,999.99 from one
or more municipal funds, the municipality must comply with the procedure prescribed by this chapter for
competitive sealed bidding or competitive sealed proposals. The municipality may use the competitive
sealed proposal procedure for high technology purchases, insurance and other services as required.
XI. Formal Bids
All purchases for an item or items whose aggregate total cost will be over $100,000.00 must be processed
as formal bids. Under no circumstances will Purchase Requisitions be split to avoid the requirement for City
Council approval which is reg uired for all Durchases over S100,000.00.
• Sealed Bid or Proposal Procedures
It is the policy of the City of The Colony to use a sealed bid proposal or design/build procedure in
compliance with Chapter 252 (Purchasing and Contracting Authority of Municipalities) of the State of
Texas Local Government Code for any Purchasing which will total $100,000.00 or more. The Purchasing
Manager will prepare and solicit all purchases requiring sealed bids.
The competitive bidding process has three key purposes:
• Competitive solicitations for bids help ensure the best available value for funds spent and help
ensure public funds are used appropriately, according to law and only for public projects.
• The bidding process also gives an equal opportunity to those qualified and responsible vendors who
want to do business with the government.
• A standard bidding procedure assures public money properly safeguarded.
• Requirements Under State Law
Before a city may enter into a contract requires an expenditure of more than $100,000.00 from one or
more municipal funds, the city must
Comply with certain statutory procedures for competitive and sealed bidding or competitive sealed
proposals when purchasing goods or services, including high technology items or insurance, and comply
with required prescribed methods of construction Purchasing.
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• Advertising and Advertising Time Requirements
Local Government Code requires the sealed bid to be advertised publicly with notice of the time and
place at which the bids will be publicly opened and read aloud. The public notice must be published at
least once a week for two consecutive weeks in a newspaper published in the municipality that is listed
as the City's paper of record. The date of the first publication must be before the 14th day before the
date set to publicly open the bids. In addition to the paper of record, the City, at its option may also
advertise with other publications and/or organizations.
Advertising notices for proposed purchases must include:
Requirements or specifications, or statement of where the requirements or specifications obtained,
location and time for receiving and opening solicitations, and name and position of the employee who
receives returned solicitations.
Bid packet submitted to purchasing for advertisement processing to Dallas Morning News no later than
4:OOPM Tuesday of the week for advertising.
Bid Specifications
All sealed bids must include complete and detailed specifications of the item or items and/or services to
be purchased. THE CREATION AND SUBMISSION OF SPECIFICATIONS IS THE SOLE RESPONSIBILITY OF
THE USER DEPARTMENT. Purchasing will assist the user department in any way necessary, will not be
responsible for the final content of the specifications. Purchasing is responsible for all remaining parts
of the bids/proposals terms, conditions and document requirements including any legal terminology
required by law.
Bid Preparation and Administration
All sealed bids and proposals will be prepared and administered by the Purchasing Manager. Purchasing
will be responsible for posting the bids on the City's website to ensure all bid information is available on
the website. The bid number will be assigned by the Purchasing Manager and advertising dates, pre-bid
meeting dates and the bid opening date coordinated with Purchasing.
The Purchasing Manager or their designee will be responsible forthe bid opening and reading of the bids
received. Once opened, a pre -audit bid tabulation will be created. Once bid tabulation is completed, the
tabulation along with all bids sent to the initiating department for review and signature approving
tabulation. When all bids have been reviewed, the initiating department will be responsible for
submitting to purchasing a WRITTEN recommendation of bid award and background wording to be
included in the agenda memo to the City Council.
• Bid Opening and Pre -Bid Procedures
In order to establish a standardized format for pre-bid and bid opening meetings the following
procedures should be adhered to:
• The Purchasing Manager shall conduct all pre-bid and bid opening meetings.
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• In addition to the Purchasing Manager, or the Purchasing Manager's representative, there will be at
least one City employee from the department who submitted the purchase request at all pre-bid
and bid opening meetings. This employee will be knowledgeable of the bid specifications and at pre-
bid meeting should be prepared to answer all questions pertain to the specifications. At bid
openings the purchasing employee will as the recorder of all information read at the bid opening
and will publicly confirm all information was read completely and truthfully. At the bid opening, all
bids will be opened, and all pricing will be called out in accordance with the bid opening regulations.
Bid Recommendations and State Law Regarding Bid Awards
The requesting department is solely responsible for reviewing the specifications offered in each bid to
ensure the specifications meet the bid requirements and must provide a written review of any bid not
met the specifications. If the bids offered meet the specifications requested, the recommendation may
be made based on the procedures set out in the State of Texas Local Government Code Chapter 252, Sub
Chapter C, 252.043. Under this chapter entitled Award of Contract, the City may award the contract
based on:
• Sub -section (a) of the competitive sealed bidding requirement applies to the contract for goods or
services, the contract must be awarded to the lowest responsible bidder or the bidder who provides
goods or services at the best value for the municipality.
Sub -section (b) in determining the Best Value for the municipality, the municipality may consider:
• The purchase price;
• The reputation of the bidder and of the bidder's goods and services;
• The quality of the bidder's goods and services;
■ The extent to which the goods or services meet the municipality needs;
• The bidder's past relationship with the municipality;
• The impact on the ability of the municipality to comply with laws and rules
relating to contracting with historically underutilized businesses and non-
profit organizations employing persons with disabilities;
• The total long-term cost to the municipality to acquire the bidder's goods or
services;
• Any relevant criteria specifically listed in the request for bids or proposals.
Sub -section (c) Before awarding a contract under this section, a municipality must indicate in the
bid specifications and requirements that the contract may be awarded either to the lowest
responsible bidder or the bidder who provides goods or services at the best value for the
municipality.
XII. Request for Proposals
The competitive bidding procedure as provided herein shall be used forthe award of all contracts subject to
the provision of this section, except in the case of High Technology purchases in the City may follow the
competitive sealed proposal procedure.
High Technology as defined in Local Government Code Section 252.001 is as follows: The term "high
technology Purchasing" means the Purchasing of equipment, goods, or services of a highly technical nature,
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including but not limited to: information processing equipment, telecommunications equipment, radio and
microwave systems, electronic distributed control systems (including building energy management
systems) as well as technical services related to such equipment and goods.
XIII. Procedures for Request For Proposals areas follows
• All requests for items to be purchased by Request for Proposal (RFP) must follow the same procedure as
any other request for item(s) estimated to cost over $100,000.00.
Public notice (newspaper advertisements) is made in the same manner as those for competitive sealed
bidding, except the ads will state the proposals will be publicly opened.
■ The request for proposals shall specify the relative importance of price and other evaluation factors and
the awareness of the contract shall be made to the responsible offer on whose proposal is determined to
be the most advantageous to the City, taking into consideration the relative importance of price and
other evaluation factors set forth in the Request for Proposals. The RFP may contain a "scope of work"
and request a "statement of work".
■ Discussions in accordance with the terms of a request for proposals and with regulations adopted by
the governing body of the municipality may be conducted with offerors who submit proposals and who
are determined to be reasonably qualified for the award of the contract. Offerors shall be treated fairly
and equally with respect to any opportunity for discussion and revision of proposals. To obtain the best
final offers, revisions may be permitted after submissions and before the award of the contract.
■ Sub -section (h) of the competitive sealed proposals requirement applies to the contract; the contract
must be awarded to the responsible offer who proposal determined to be the most advantageous to
the municipality considering the relative importance of price and the other evaluation factors included
in the request for proposals.
■ In addition, under the State of Texas Local Government Code Chapter 271, Sub Chapter 271.9051 a
municipality may consider a bidder's principal place of business. Other considerations for a bid award
may be:
• The safety record of the bidder,
• Companies orindividuals indebted tothe municipality;
• Inclusion of required bonding and insurance;
• Any other consideration as listed in the State of Texas Local Government Code.
XIV. Confidentiality of Information in Bids or Proposals
• Trade secrets and confidential information in competitive sealed bids are not open for public inspection.
• If provided in a request for proposals, proposals shall be opened in a manner that avoids disclosure of
the contents of competing offerors and keeps the proposals secret during negotiations.
Texas Government Code Chapter 252 - All proposals are open for public inspection after the contract is
awarded, but trade secrets and confidential information in the proposals are not open for public
inspection.
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XV. Request for Qualifications (RFQ) — The Professional Services Purchasing
Texas Government Code Chapter 2254 defines a specific procedure the City must follow before awarding a
contract for professional services provided by a certified public accountant; architect; land surveyor;
physician or surgeon; optometrist; registered nurse; forensic analyst or forensic science expert; real estate
appraiser; professional engineer or interior design. The City must make the award based on demonstrated
competence and qualifications to perform the services. The City shall first select the most highly qualified
provider, then attempt to negotiate with the provider a contract for a fair and reasonable price.
Texas Government Code Title 10, Chapter 2254. Professional Services are defined as the following:
accounting, architecture, landscape architecture, land surveying, medicine, optometry, professional
engineering, real estate appraising, or professional nursing, forensic science, provided in connection with the
professional employment or the practice of a person licensed or registered as a certified public accountant,
architect, landscape architect, land surveyor, a physician (including a surgeon), an optometrist, a professional
engineer, state certified or state licensed real estate appraiser, a registered nurse or a forensic analyst or
forensic expert provided by a person lawfully engaged in interior design, regardless of whether the person is
registered as an interior designer under Chapter 1053, Occupations Code.
Personal and professional services are exempted from the competitive bidding process and are procured
through the use of Request for Qualifications (RFQ) documents. Purchasing is available to consult with
departments regarding the preparation of information; however, the presentation of technical and
qualifications aspects of personal and/or professional services included in the RFQ documents is the sole
responsibility of the requesting department.
A. Professional Services rendered by members of a recognized profession as defined by Texas Government
Code Sec. 2254.002 or who possess special skills, which are mainly mental or intellectual, rather than
physical or manual. Texas Local Government Code Sec. 252.022(a) (4) exempts professional services from
competitive bidding requirements.
B. Consulting Services
The service of studying or advising the City under a contract does not involve the traditional relationship
of employer and employee.
XVI. State Contracts and Interlocal Agreements
As provided in Section 271.083 of the Local Government Code, the City may buy items from State contracts.
This section of the Code requires local governments to designate a single point of contract (SPOC) to process
orders. Purchasing is the only designated representative (SPDC) authorized to process requisitions with the
State General Services Commission. Some Federal (GSA) contracts offered through the State may be used
by the City without need for competitive bidding. In all cases involving cooperative purchasing programs,
the Purchasing Department will assist in obtaining comparative pricing to ensure the best value is obtained
for the City.
XVII. Interlocal Agreements
As provided in Chapter 791, Texas Government Code and Chapter 271.102 of the Local Government Code,
the City may enter into an Interlocal agreement with another public entity in the United States for the
purposes of pooling resources to obtain favorable pricing for goods and services. Interlocal Agreement
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and Cooperative purchases require City Council approval if exceeding $100,000.00.
XVIII. Other Cooperative Purchasing Programs
Purchasing has established several cooperative purchasing agreements with many public entities (State and
City) approved by City Council. Among them are the Houston -Galveston Area Council of Governments
(HGAC), Omnia Partners, the Local Government Purchasing Cooperative (Buy Board), and others. Complete
list of Cooperative Purchasing agreements may be found at S drive> City Share> Purchasing> Interlocal
Agreement folder. All agreements are established forthe purpose of achieving maximum savings to the City
throughpooling economic buying power. A purchase from an approved cooperative satisfies the
requirement for competitive bidding.
XIX. Disaster Purchases
In the event of a tornado, flood, civil riot, or other declared disaster, the City may need to temporarily adjust
its purchasing procedures to meet the needs of the residents. Purchasing will strive to make sure purchases
meet the federal guidelines outlined in 2 CFR 200.317-326. Purchases not following the guidelines in this set
of regulations may not be eligible for FEMA reimbursement.
Purchasing will take the following actions when making purchases submitted to FEMA for reimbursement.
(This list is not all-inclusive):
■ Carefully document each purchase.
• Include the method used to obtain the good or service.
• Include the vendors who were contacted for a quote.
• Include HUB vendors in the bidding process.
• Include the advertisement.
• Include the justification fora particular vendor's selection.
Maintain oversight of contractors to ensure their performance is in accordance with the terms, conditions,
and specifications of the contract or purchase order. Avoid the acquisition of duplicative or unnecessary
items. Use excess or surplus property in lieu of purchasing new equipment and property wherever possible
whenever such use is feasible and reduces project costs. Use Value Engineering clauses in construction
contracts to allow for reasonable opportunities for cost reductions.
Purchases must be conducted in a manner that allows for full and open competition. Small purchases of
up to$100,000.00 must be awarded to the lowest responsible bidder. Three (3) or more quotes must be
obtained, and HUB vendors must be invited to provide a quote. Larger purchases of $100,000.00 or more
are subject to competitive bids or proposals. The City will follow the guidelines set forth in 2 CFR 200.317-
326 to ensure that all processes are documented and all responsible bidders have the opportunity to
participate.
No employee, officer, or manager may participate in the selection, award, or administration of a
contract supported by a federal award (FEMA) if they have a real perceived conflict of interest.
Purchase may be made using Texas-based cooperative contracts, however, purchasing must provide
FEMA with proof the contract was bid and awarded in accordance with 2 CFR 200.317-326 in order to
obtain reimbursement.
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Piggyback contracts are generally not eligible for FEMA reimbursement. These should be avoided when
making purchases following a disaster. Non-competitive (sole source) purchases are permitted under
the following conditions:
The item is available only from a single source.
The public exigency or emergency for the requirement will not permit a delay resulting from
competitive solicitation.
The Federal awarding agency or pass-through entity expressly authorizes
non-competitive proposals in response to a written request from the City of The Colony. After a
solicitation of a number of sources, competition is deemed inadequate. City will have as many pre -
disaster contracts in place as possible in order to be prepared for a catastrophic event. These contracts
will be current, and purchasing will provide all required documentation to FEMA upon request.
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XX. State Law Regarding Historically Underutilized Business Enterprises
Under the Local Government Code, Historically Underutilized Businesses (HUB) requires the City send
quotations to at least two HUB businesses for all purchases total between $10,000.00 and $100,000.00,
if available. The business must be listed on the State's HUB list
https:/Ymvcpa.cpa-state.tx.us/tpasscmblsearch
Local Government Code requires all Texas governmental entities to contact at least two (2) disadvantaged
businesses on a rotating basis when making any expenditure of more than $10,000.00 but less
than$ 100,000.00. The disadvantaged businesses contacted must be based on information provided by the
Office of Small Business Assistance of the Texas Department of Commerce. If the list fails to identify a
disadvantaged business in the county in which the City is situated, or if the purchase declared as an
emergency, the City is exempt from this requirement.
XXI. Exemptions from the Competitive Sealed Bid Process
State of Texas Local Government Code Section 252.022 General Exemptions allows certain exemptions to
the Competitive Sealed Bid.
• Purchasing made because of a public calamity requires the immediate appropriation of money to
relieve the necessity of the municipality's residents orto preserve the property of the municipality.
• Purchasing necessary to preserve or protect the public health or safety of the municipality's
residents.
• Purchasing necessary because of unforeseen damage to public machinery, equipment, or other
property.
• Purchasing for personal, professional, or planning services.
• Purchasing for work performed and paid for by the day as the work progresses.
• Purchase of land or right-of-way.
• Purchasing of items that are available from only one source, including:
• Patents, copyrights, secret processes, or natural monopolies;
• Films, manuscripts, orbooks;
• Gas, water and other utility services;
• Captive replacement parts or components for equipment;
• Books, papers, and other library materials for a public library that are only from
persons holding exclusive distribution rights to the materials; and
• Management services provided by a nonprofit organization to a municipal museum,
park, zoo, or other facility to which the organization has provided significant financial
or other benefits.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056 • 972-624-3145
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Purchase of rare books, papers, and other library materials for a public library.
• Paving, drainage, street widening, and other public improvements, or related matters, if at least
one-third of the cost is to be paid by or through special assessments levied on property that will
benefit from the improvements.
• A public improvement project, already in progress, authorized by the voters of the municipality, for
which there is a deficiency of funds for completing the project in accordance with the plans and
purposes authorized by the voters.
• A payment under a contract by which a developer participates in the construction of a public
improvement as provided by Subchapter C, Chapter 212.
• Personal property sold:
• At an auction by a state licensed auctioneer;
■ At a going out of business sale held in compliance with Subchapter F, Chapter 17,
Business and Commerce Code;
■ By a political sub -department of this state, a state agency of this state, or an entity of the
federal government; or
• Under Inter -local contract for cooperative purchasing administered by a regional planning
commission established under Chapter 391.
• Services performed by blind or severely disabled persons.
• Goods purchased by a municipality for subsequent retail sale by the municipality.
• Electricity
• Advertising, otherthan legal notices.
This chapter does not apply to bonds or warrants issued under Subchapter A, Chapter 571.
This chapter does not apply to expenditures by a municipally owned electric or gas utility or unbundled
Departments of a municipally owned electric or gas utility in connection with any purchases by the
municipally owned utility or Departments of a municipally owned utility made in accordance with
Purchasing procedures adopted by a resolution of the body vested with authority for management and
operation of the municipally owned utility or its departments that sets out the public purpose to be achieved
by those procedures. This subsection may not be deeded to exempt a municipally owned utility from any
other applicable statute, charter provision, or ordinance.
This chapter does not apply to an expenditure described by Section 252.021(a) if the governing body of a
municipality determines that a method described by Subchapter H, Chapter 271, provides a better value for
the municipality with respect to the expenditure than the procedures described in this chapter and the
municipality adopts and uses a method described in that subchapter with respect to the expenditure.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056 • 972-624-3145
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City by the Lake
XXII. Brand Name or Equal Specifications
Brand name specifications list a good or service by brand name, model and other identifying specifications
to limit the bidding to a single preferred product. This type of specification discourages competition and
should be avoided unless the item is the only one that will satisfy the City's requirements. It is useful when
purchasing replacement parts where only the brand name item will work. It should be noted that the City might
have to explain in a court of law why another brand will not work, so this type of specification should be used
judiciously. Equal specifications are similar to brand name specifications, except that equal products are
acceptable in place of the named brand.
XXIII. Bonding Requirements
Bids may be subject to bonding requirements. Typically, a bid bond is required for all The Colony projects or
on bids exceeding a specified dollar level, unless City Manager Office states otherwise. This ensures if the
bidder attempts to withdraw after the bid is accepted, the City will not suffer loss.
In Texas, the successful bidder on a public works contract exceeding a dollar level set by law must post a
performance bond. The successful bidder on any other contract exceeding certain dollar levels may have to
post a performance bond if required by the City.
Surety companies authorized to do business in this State should execute the bonds and be verified by The
Colony staff or consultants.
The City should always consider the ramifications in deciding whether to require a bond when there is a
choice. If there is a substantial risk of loss, a bond should be required. The cost of bonding will undoubtedly
be passed along in the contract price.
Bid Bonds
Bid Bonds guarantee that if the City accepts a bid, the contractor will take the job. Each bid shall be
accompanied by an acceptable bid bond issued by a surety licensed to conduct business in the State
of Texas in the amount of 5% of the greatest total amount of Bid. Bid security shall be made payable
to, and shall revert to, the City of The Colony in the event the successful Bidder shall fail to execute
the contract and/or Performance and Payments Bonds, if required, within fifteen (15) days after
receipt of the contract for execution. The City of The Colony reserves the right to retain the Bid
Security of the next two lowest bidders until low bidder enters into contract or until 120 days after
bid opening, whichever is shorter. All other bid security will be returned as soon as practicable. If a
Bidder refuses to enter into a contract, the City of The Colony will retain the Bid Security as
liquidated damages, but not as a penalty.
• Payment Bond
A payment bond says the contractor will make all necessary payments to subcontractors and
suppliers It is the security executed by the contractor and the Surety, furnished to the City to
guarantee payment of all legal debts of the contractor pertaining to the contract. The Texas
Government Code mandates that a municipality contracting for public work in excess of $100,000.00
shall require its contractor to execute a payment bond.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056 • 972-624-3145
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Performance Bond
A Performance bond says the project will be finished according to the terms of the contract. It is
the security executed by the contractor and the Surety, furnished to the City to guarantee the
completion of the work in accordance with the terms of the contract. A performance bond is
required if the total contract price exceeds $100,000. The contractor shall guarantee all public
improvements for a period of two (2) years after the date of final acceptance by the City. A
maintenance bond shall be in an amount equal to twenty-five (25) percent of the cost of
construction.
Maintenance Bond
Maintenance bonds, otherwise known as warranty bonds, protect the Obligee (Owner) of a
completed construction project from defects beyond the end of the specified warranty period.
Frequently mistaken for insurance, maintenance bonds are not insurance policies.
XXIV. Sales Tax Exemption Administration for Public Works and Construction
Contracts
The City of The Colony is exempt from Texas sales and use tax on qualifying tangible personal property
incorporated into public works and construction projects. Project Managers, Purchasing, and Finance personnel
shall administer construction contracts in accordance with applicable provisions of the Texas Tax Code and 34
Texas Administrative Code (TAC) § 3.291, Contractors.
Prior to solicitation, Project Managers shall coordinate with Purchasing to ensure bid and contract documents
include the City's sales tax exemption requirements and clearly communicate the contractor's responsibility to
separately identify materials incorporated into the project from labor and other project -related costs. During pre-
bid meetings and contract negotiations, staff should advise prospective contractors that only qualifying materials
incorporated into the completed project may be eligible for the City's sales tax exemption.
Bidders shall separately identify the cost of materials to be incorporated into the completed project from labor
and all other project -related costs within their bid or proposal submission. Material costs identified in the
solicitation response may be used to establish the extent of the City's sales tax exemption and incorporated into
the final contract documents.
Following contract award and prior to commencement of work, the contractor shall provide a detailed cost
breakdown identifying:
Tangible personal property that will be incorporated into and become a permanent part of the completed project;
and Labor, supervision, equipment, tools, machinery, rentals, leases, fuel, office expenses, temporary facilities,
repair parts, consumable supplies, overhead, and other costs that do not become a permanent part of the
completed project.
Project Managers are responsible for monitoring contractor compliance with sales tax exemption requirements
throughout the life of the project. This includes reviewing bids, schedules of values, pay applications, change
orders, and supporting documentation to ensure qualifying incorporated materials remain segregated from
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056 • 972-624-3145
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taxable costs.
The City shall provide exemption documentation for qualifying incorporated materials when applicable.
Contractors remain responsible for complying with all applicable Texas sales and use tax requirements and for
properly remitting taxes on taxable purchases used in the performance of the work.
In accordance with 34 TAC § 3.291, the City's sales tax exemption generally applies only to qualifying tangible
personal property incorporated into the real property improvement. Equipment, machinery, tools, fuel, rentals,
leases, temporary facilities, repair parts, office supplies, consumable materials, and similar items used by the
contractor in performing the work remain taxable, regardless of whether the project is performed for a tax-
exempt governmental entity.
When questions arise regarding the taxability of an item, service, or project cost, Project Managers shall consult
with Purchasing prior to approving the contractor's proposed tax treatment. Purchasing shall provide guidance
and, when necessary, coordinate with Finance or the City's Attorney to ensure compliance with applicable laws
and regulations.
Failure by a contractor to properly segregate exempt and taxable costs may result in the denial of the City's sales
tax exemption, disallowance of claimed exempt costs, adjustment of contract payments, or other remedies
available under the contract.
XXV. Insurance Requirements
Whenever the City contracts with an outside party (Contractor, consultant or vendor) for goods or services,
the bid or request for proposal that is released to the public should include the indemnity clause (hold
harmless clause), along with a contractual agreement to be executed on award of the contract that transfers
the risk of the project from the City to the contractor. Because the contractor may or may not have the
financial resources to handle the risks transferred in the contract, the City may require insurance be
purchased and maintained by the contractor for financial security.
Most contracts are tailored for individual projects and programs; therefore, certain elements of the
insurance required should be addressed in every contract document. One of the most important elements
is the actual insurance coverage, which includes the coverage types and limits dependent upon the nature
of the project program.
Although not all types and levels of insurance are required for every project (and limits will vary by
exposure), understanding the coverages provided by these policies is important to assure all of the City's
potential liabilities and exposures from the project are property protected. Should any questions arise about
the amounts and types of insurance requirements the initiating department should contact the Purchasing
Manager.
XXVI. Insurance
Insurance shall be maintained by the contractor/vendor in accordance with the following:
Except as otherwise specified in the contract, the contractor and their subcontractors of any tier are
required to maintain insurance coverage with policy limits not less than those set forth in this policy. They
are also required to always maintain this coverage at their own expense during the performance of the work.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056 • 972-624-3145
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It shall be the responsibility of the contractor and any subcontractors to maintain adequate insurance
coverage and to ensure all subcontractors are adequately covered at all times. Failure of the contractor and
his subcontractors to maintain adequate coverage shall not relieve them of any contractual responsibility of
obligation.
CERTIFICATES OF INSURANCE
Prior to commencing work and at the time of execution of the contract and each subcontract, the contractor
and his subcontractors shall furnish the City of The Colony with certificates of insurance as evidence the
policies providing the required coverage and limits of insurance are in full force and effect. The certificates
of insurance shall name the City as an additional insured where applicable on both Automobile and General
Liability policies. The certificates shall provide any company issuing an insurance policy for the work under
contract shall provide, in writing, no less than 30 days' advance notice of cancellation, nonrenewal, or
material change in the policy of insurance. In addition, the contractor shall immediately provide written
notice to the City of The Colony when a decision to cancel, terminate, or alter any insurance policy.
Certificates of insurance forcontractor and subcontractor -furnished insurance and notices or cancellations,
terminations, or alterations of such policies shall be mailed to:
Purchasing
City of The Colony
6800 Main Street
The Colony, TX 75056
COMMERCIAL GENERAL LIABILITY
This insurance shall be an "occurrence" type policy written in comprehensive form and shall protect the
contractor, their subcontractors, and the additionally insured against claims arising from bodily injury,
sickness, disease or death of any person other than the contractor's employees, as well as damage to
property of the City of The Colony or others arising out of an act of omission of the contractor,
subcontractor, or their Managers or employees. This policy shall also cover Premises, Operations,
Independent Contractors, Products/completed operations, Personal Injury, Contractual Liability, Damage to
property rented by the City. The liability shall not be less than:
General Aggregate: $2,000,000
Bodily Injury and Property Damage Each
$1,000,000
Occurrence:
Products and Completed Operations
$2,000,000
Aggregate:
BUSINESS AUTOMOBILE LIABILITY
This insurance shall be written in the comprehensive form and shall protect the contractor and his
subcontractors and the additional insured against all claims of others arising from the use of motorvehicles,
whether they are owned, non -owned, or hired. The limit of liability shall not be less than:
Bodily Injury:
$500,000 per person
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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$1,000,000 per occurrence
Property Damage: $100,000
Or Combined Single limit: $1,000,000
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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It is understood the purpose of the insurance required is to cover any liability that may result, not only against
the contractor/vendor but also against the City, as a result of contractor/vendor performance of a contract
or work performed within the City of The Colony. Therefore, such insurance shall not include any exclusion,
which may be relied upon to cause the City not to be covered. Generally, the insurance coverage provided by
a company rated A+ or A in the current Best Key Rating Guides.
All insurance other than Worker's Compensation shall be of the occurrence type.
WORKERS` COMPENSATION AND EMPLOYERS' LIABILITY
The insurance shall protect the contractor and the subcontractors against all claims under applicable state
works' compensation laws. The insured shall agree to hold the City harmless from claims for injury, disease,
or death of employees which, for any reason, may not fall within the provision of workers' compensation
law. The limits carried under part two, Employers Liability shall be:
Bodily Injury by Accident $1,000,000 Each Accident Bodily Injury
by Disease $1,000,000 Each Employee Bodily Injury
by Disease $1,000,000 Policy Limit
INDEMNIFICATION
For the consideration included in the bid price, the contractor and their subcontractors shall pay, indemnify,
and hold harmless the City, its Managers, guests, consultants, invitees, and employees for all suits, actions,
claims, demands, damages, losses, expenses, including attorney fees, court costs and judgement of every
kind and description to with the City, its Managers, guests, consultants, invitees, or employees may be
subjected to by property damage; reason of injury to persons; death; omission; negligence or gault of the
contractor, its subcontractors, their Managers, or employees committed in connection with this contract,
contractor's performance hereof or any work performed hereunder.
The contractor and his subcontractor shall indemnify and hold harmless the City, its Managers, employees
and consultants \including the Engineer), from and against all claims, demands, actions, suits, damages,
losses, expenses, costs including attorney fees, court costs and judgements of every kind and description
arising from, based up on, or arising out of the violation of any federal, state, country, or city law, bylaw,
ordinance or regulation by the contractor, its Managers, trainees, invitees, servants, and employees.
WAIVER OF SUBROGATION
The contractor and his subcontractors shall require their insurance carrier, with respect to all insurance
policies, to waive all rights of subrogation against the City of The Colony, its commissioners, partners, officials,
directors, officers, Managers and employees and against all other contractors and subcontractors.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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CONTRACTOR SAFETY SPECIFICATIONS
City safety personnel or any supervisor may, but is not required to, order work be stopped if a condition of
immediate danger is found to exist. Nothing contained herein shall be construed to shift responsibility or risk
of loss for injuries or damage sustained as a result of a violation of the Article from the contractor to the City
of The Colony, its employees or Managers. The contractor shall remain solely and exclusively responsible for
compliance with all safety requirements and for the safety of all persons and property at the project site.
The parties hereto expressly agree the obligation to comply with applicable safety provisions is a material
provision of the contract and a duty of the contractor. The City of The Colony reserves the right to require
demonstration of compliance upon reasonable request. In the event the contractor is unable to demonstrate
compliance with the safety provisions of the contract, the parties agree that such failure is deemed to be a
material breach of agreement; and the contractor agrees that upon such breach, all work pursuant to -the
contract shall terminate until demonstration to the City of The Colony that the safety provisions of the
agreement have been complied with. In no event shall action or failure to act on the part of the City of The
Colony be construed as a duty to enforce the safety provisions of the agreement nor shall it be construed to
create liability for the city, its employees or Managers, for any act or failure to act in respect to the safety
provisions of the agreement.
Safety Equipment - The contractor shall be responsible for the safety equipment to be used by its employees
and/or all of its subcontractors working on the City of The Colony's property. This equipment will include, but
may not be limited to, hard hats, safety belts or harnesses, eye, face, hand, ear, or hearing protection. Sport
or athletic type shoes not considered suitable work shoes on any construction site.
Purchasing Subject to Federal Fundin
The United States Office of Management and Budget (OMB) issued the Uniform Guidance, which reforms
rules applicable to entities receiving federal grant funding by streamlining and superseding eight OMB
circulars (A-21, A-87, A-122, A-110, A-102, A- 133, A-50 and A-89). The new Purchasing standards are found
in Subpart D: Post Federal Award Requirements: 2 CFR §200.317 through §200.326 and became effective
December 26, 2014. The OMB issued addenda to the Uniform Guidance, including its final addendum on May
17, 2017, indicating implementation of the new Purchasing standards and following the OMB's priorguidance
during the allotted grace periods. The new Purchasing standards will apply to new and incrementally funded
awards, and implementation will commence on October 1, 2019.
A. Notice of Adoption
The City of The Colony elected to utilize the extension offered bythe United States Office of Management
and Budget (OMB) for implementation of the new Purchasing standards accompany the Uniform
Guidance. Per an addendum issued by the OMB on May 17, 2017, the new standards will apply starting
with fiscal years beginning on or after October 1, 2018, thereby applying to the City in Fiscal Year 2020.
Compliance
In compliance with Federal and State rules, all local government purchasing entities are required to check
the list of vendors excluded from doing business at the federal level by utilizing the federal Excluded
Persons List System (EPLSJ. No contract awarded to any person/entity listed on the EPLS system.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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Users can access the EPLS system at www.sam-gov to perform a search for excluded vendors or contact
purchasing for assistance.
NOTE: This requirement is mandatory for any Purchasing transaction regardless of funding stream.
C. Additional Standards
In addition to the City's adopted procedures described above, which are incorporated herein by
reference, the City shall abide by the following purchasing procedures applicable to Purchasing subject
to federal funding as referenced in 2 C.F.R. 200: Uniform Administrative Requirements, Cost Principals
and Audit Requirements for Federal Awards (Uniform Guidance), which is hereby incorporated by
reference.
Compliance Requirements - Purchasing
The following is an overview of the Purchasing standards and procedures applicable when procuring property
and services under a Federal award in accordance with 2 CFR §200.317 through §200.326, which are hereby
incorporated by reference.
The City, as a non -Federal entity other than State, will follow §200.318 General Purchasing standards through
§200.326 Contract provisions. [See §200.317].
A. Purchasing Procedures
The City will use its own documented Purchasing procedures, which reflect applicable State and local
laws and regulations, provided the purchases conform to applicable Federal statutes and the Purchasing
requirements identified in 2 CFR part 200. [See §200.318(a)].
B. Conflicts of Interest/Standards of Conduct
The City will maintain written standards of conduct covering conflicts of interest and governing the
actions of its employees engaged in the selection, award and administration of contracts.
No employee, officer, or Manager may participate in the selection, award, or administration of a
contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a
conflict of interest would arise when the employee, officer, or Manager, any member of his or her
immediate family, his or her partner, or an organization which employs or is about to employ any of
the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a
firm considered for a contract.
2. Officers, employees, and Managers of the City may neither solicit nor accept gratuities, favors, or
anything of monetary value from contractors or parties to subcontracts. However, non -Federal
entities may set standards for situations in which the financial interest is not substantial orthe gift is
an unsolicited item of nominal value.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056 •972-624-3145
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3. If the City has a parent, affiliate, or subsidiary organization not a state, local government, or Indian
tribe, the City will also maintain written standards of conduct covering organizational conflicts of
interest. Organizational conflicts of interest mean that because of relationships with a parent
company, affiliate, or subsidiary organization, the City is unable or appears to be unable to be
impartial in conducting a Purchasing action involving a related organization.
4. The City will disclose any potential conflicts of interest in writing to the Federal awarding agency or
pass-through entity in accordance with applicable Federal awarding agency policy. [See 2 CFR
§200.112]. Additionally, the City will disclose, in a timely manner, in writing to the Federal awarding
agency or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity
violations potentially affecting the Federal award. Further, if applicable, the City will make post -
award reports as provided by Appendix XII to Part 200. Failure to make a required disclosure may
result in any number of significant remedies, including suspension or debarment. [See 2 CFR
§§200.113 & 200.338].
Violations of this policy may result in disciplinary action consistent with City disciplinary policy,
including but not limited to dismissal. Further, violations referred to the appropriate law
enforcement agency for investigation and possible prosecution.
C. Oversight
Once the Contract is awarded, oversight must be maintained to ensure contractors perform in
accordance with the terms, conditions, and specifications of their contracts or purchase orders.
All proposed purchasing actions reviewed to avoid the purchase of unnecessary or duplicative items.
Where applicable, consideration is given to consolidating or breaking out Purchasing to obtain a more
economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives,
and any other appropriate analysis to determine the most economical approach.
D. State and Local Intergovernmental Agreements
The City may enter into state and local intergovernmental agreements where appropriate for Purchasing
or use of common or shared goods and services. [See §200.318(e)] Federal excess and surplus property
may be used in lieu of purchasing new equipment and property whenever such use is feasible and
reduces project costs. [See §200.318(()]
E. Construction Project Contracts
Construction project contracts of sufficient size may use value engineering clauses, as defined in
§200.318(g) to offer reasonable opportunities for cost reductions.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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F. Awarding Contracts
Contracts awarded only to responsible contractors possessing the ability to perform successfully under the terms
and conditions of a proposed Purchasing. Consideration will be given to such matters as contractor integrity,
compliance with public policy, record of past performance, and financial and technical resources, as well as whether
the contractor is suspended or debarred from receiving federal funds. [See §200.318(h)]. The City will maintain
records sufficient to detail the history of Purchasing in accordance with §200.318(i).
The City, in accordance with provisions set forth in §200.3180), may use a time and materials type
contract only after a determination no other contract is suitable and if the contract includes a ceiling
price that the contractor exceeds at its own risk.
G. Contract Disputes
The City alone shall be responsible, in accordance with good administrative practice and sound business
judgment, for the settlement of all contractual and administrative issues arising out of Purchasing
pursuant to provisions set forth in §200.318(k).
Competition
All Purchasing transactions will be conducted in a manner providing full and open competition consistent
with the standards of §200.319.
In order to ensure objective contractor performance and eliminate unfair competitive advantage,
contractors that develop or draft specifications, requirements, statements of work, or invitations for bids
or requests for proposals excluded from competing for such purchasing. Some of the situations
considered restrictive of competition include but are not limited to:
1. Placing unreasonable requirements on firms in order for them to qualify to do business;
2. Requiring unnecessary experience and excessive bonding;
3. Noncompetitive pricing practices between firms or between affiliated companies;
4. Noncompetitive contracts to consultants that are on retainer contracts;
5. Organizational conflicts of interest;
6. Specifying only a "brand name" product instead of allowing "an equal" product to be offered and
describing the performance or other relevant requirements of the Purchasing; and
7. Any arbitrary action in the Purchasing process. §200.319(a)
Geographical Limitation
Unless specifically excepted as provided in §200.319(b), the City will conduct Purchasing in a mannerthat
prohibits the use of statutorily or administratively imposed state or local geographical preferences in the
evaluation of bids or proposals.
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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Procedure Requirements
In accordance with the provisions indicated in §200.319(c), the City's written procedures for Purchasing
transactions shall incorporate a clear and accurate description of the technical requirements for the
material, product, or service to be procured and include all requirements which the offerors must fulfill
and all other factors to be used in evaluating bids or proposals.
All prequalified lists of persons, firms, or products which are used in acquiring goods and services shall
be kept current and include enough qualified sources to ensure maximum open and free competition,
and potential bidders will not be precluded from qualifying during the solicitation period. [See
§200.319(d)].
K. Methods of Purchasing with Federal Funds
The City will use one of the following five Purchasing methods as discussed in 2 CFR §200.320 when
making purchases with federal funds. Should State or local Purchasing requirements applicable to a
purchase with federal funds be more restrictive than Federal requirements, the more restrictive
requirements or methods will be followed. The type of Purchasing process to use will depend on the cost
and type of services or item(s) being purchased:
• Micro -purchase
• Small purchase procedures
• Sealed bids
• Competitive proposals
• Noncompetitive proposals (sole source)
L. Contracting with Small and Minority Businesses, Women's Business Enterprises, and Labor Surplus Area
Firms
The City takes all necessary affirmative steps as described in §200.321 to assure minority businesses,
women's business enterprises, and labor surplus area firms are used when possible.
M. Purchasing of Recovered Materials
If applicable, the City and its contractors will comply with section 6002 of the Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act. [See §200.3221. This provision applies to a
non -Federal entity that is a state agency or an agency of a political sub -department and its contractors.
N. Contract Cost and Price
The City will abide by the provisions of §200.323 including, but not limited to performing a cost or price
analysis and negotiating profit as discussed therein.
Federal Awarding Agency or Pass -Through Entity Review
In accordance with §200.324, the City will make available upon request from the Federal awarding agency or
pass-through entity:
A. Technical specifications on proposed Purchasing where the Federal awarding agency or pass-
through entity believes such review needed to ensure the item or service specified one being
proposed for acquisition
City of The Colony Finance Department
6053 Main Street, The Colony, TX 75056. 972-624-3145
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B. Purchasing documents, such as requests for proposals or invitations for bids, or
independent cost estimates, for pre -Purchasing review, under the circumstances listed therein.
Additionally, §200.326(c) provides an exemption to the pre -purchasing review if it is determined
Purchasing systems comply with the standards of this part. To this end, the City may request
Purchasing system be reviewed by the Federal awarding agency or pass-through entity to determine
whether the system meets federal standards in order for the system to be certified; or the City may
also self -certify its Purchasing system in accordance with the provisions in §200.324(c), which does
not preclude Federal awarding agency or pass-through entity right to survey the system.
Contract Provisions
Pursuant to §200.326 the City will include in all federally -funded contracts, the applicable provisions
described in Appendix II to 2 CFR Part 200 - Contract Provisions for non -Federal Entity Contracts under Federal
Awards.
XXVI. Contractual Agreements for Services
1. Introduction and Purpose
Written contracts are essential tools for protecting the interests of the City and ensuring transparency,
accountability, and legal enforceability in the procurement of services. Clear contractual agreements help
prevent misunderstandings, define responsibilities, and minimize financial, legal, and operational risk. They
provide a definitive record of the terms under which services are performed, and funds are expended.
By requiring all service -related procurements, whether for infrastructure, operations, or professional
consulting—to be documented through formal contracts, the City ensures:
• Compliance with Texas state law;
• Consistency and fairness in vendor relationships;
• Clear scope, cost, and performance expectations;
• Improved audit readiness and financial control.
This section establishes the City's minimum standards for contract formation, execution, and management
and applies uniformly across departments.
2. Legal Authority
This section is adopted in accordance with the following laws and administrative requirements:
City of The Colony Finance Department
6800 Main Street, The Colony, TX 75056 • 972-624-3145
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• Texas Government Code § 2252.904(b): Requires formal written agreements for governmental
service contracts.
• Texas Government Code § 2252.032: Establishes requirements for public works contracts and
retainage handling.
• Texas Government Code Chapter 2254: Governs procurement of professional services (e.g.,
engineers, architects, attorneys).
• Texas Administrative Code Title 34, § 20.221(g): States that contracts are not binding unless signed
by all parties.
• Texas Business and Commerce Code § 26.01: Requires written contracts for agreements not
performable within one year.
3. Applicability
This section applies to:
All City departments and divisions;
• All service -related procurements, including:
o Public works services (construction, improvements, infrastructure repair);
o Non-public works services (consulting, IT, maintenance, administrative support, or other
general services);
o Professional services (licensed engineers, architects, legal, financial, or similar services).
4. Requirements for Contract Use
4.1 Written Contract Requirement
• All service agreements must be documented in a written contract executed by all required parties
before services commence.
41 No verbal agreements, emails, or memorandum of understanding shall substitute for a contract.
4.2 Public Works Contracts
■ Must include:
o A clear scope of work, payment terms, retainage clauses (if applicable), and duration.
o Provisions compliant with Gov't Code § 2252.032 on retainage, including limits on how
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much retainage a municipality can withhold on public works contracts
■ Though the Code specifies maximum limits on how much retainage a municipality
can withhold on public works contracts, it specifies no minimum amount of
retainage that a municipality must withhold. Therefore, this policy does not require
retaining be withheld. Rather, the policy of the City as it relates to retainage is
simply that staff shall adhere to the contract and that contracts shall adhere to the
Code.
o Execution by the City Manager (or designee) and approval as required by purchasing
thresholds.
Filed with the City Secretary and assigned a contract number by Finance or Procurement.
4.3 Non -Public Works / General Service Contracts
■ Must include:
o Defined deliverables, pricing, terms, and responsibilities.
o Review by the City Attorney for legal sufficiency if the value exceeds $9,999.99 or includes
liability clauses.
o Approval by the Department Head and execution by the City Manager or their designee.
4.4 Professional Services Contracts
■ Must comply with Gov't Code Chapter 2254:
o Selection based on qualifications (not price bidding);
o Negotiation of fair and reasonable compensation;
o Formal written agreement approved and executed by appropriate authority.
S. Contract Execution and Filing
No contract is valid or binding until:
o Reviewed (if required);
o Signed by all parties;
o Assigned a contract number by Procurement or Finance;
City of The Colony Finance Department
6800 Main Street, The Colony, TX 75056 • 972-624-3145
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o Filed in the City's official contract management system;
Retained according to records retention policies.
6. Contract Monitoring and Amendments
o Departments are responsible for:
o Tracking contract performance and deliverables;
o Ensuring compliance with terms;
o Managing timelines, invoicing, and renewals.
Contract amendments (scope, cost, term) must be:
o In writing;
o Approved and executed in the same manner as the original agreement.
7. Compliance and Enforcement
• Failure to comply with this section may result in:
o Suspension of payment;
o Return of unauthorized invoices;
o Corrective action, including potential disciplinary measures.
XXVIL Signature Authority Matrix
The City has established a Signature Authority Matrix to define the levels of approval required for the
authorization of invoice payments and other disbursements of City funds. The matrix assigns approval authority
based on an employee's position and the dollar amount of the expenditure, ensuring that payments are
reviewed and approved by individuals with the appropriate level of responsibility and oversight.
The Signature Authority Matrix serves as an internal control designed to promote accountability, safeguard public
funds, ensure compliance with adopted budgets and purchasing requirements, and provide a consistent approval
City of The Colony Finance Department
6800 Main Street, The Colony, TX 75056 ■ 972-624-3145
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process throughout the organization. No employee may approve of a disbursement that exceeds their delegated
authority as established in the matrix.
All invoices and payment requests must be approved in accordance with the Signature Authority Matrix prior to
processing. Approval authority may not be delegated unless specifically authorized by the City Manager or
otherwise provided for by City policy. The Finance Department is responsible for maintaining and enforcing the
approved Signature Authority Matrix and may reject payment requests that do not contain the required approvals.
he Signature Authority Matrix is incorporated into this policy and may be updated administratively as
organizational positions, responsibilities, or operational needs change. Any revisions shall be approved in
accordance with the City's established administrative procedures.
Position 11 Approval Authority
Division Manager 11 Up to $10,000
Authorized To Approve
Departmental purchase orders, payment authorizations, routine
service contracts, invoices, and travel/expense reports.
Department Director Up to $50,000
All items authorized by the Division Manager, plus larger programmatic
expenditures.
Assistant City Manager Up to $100,000
City Manager or Designee Over $100,000
Signature Authority Requirements
II items authorized by the Department Director, plus larger
rogrammatic expenditures.
uncil-delegated contract awards, Capital Improvement Project
ntracts, real property agreements, major procurements, and
ategic initiatives.
Approval authority shall be exercised only within the monetary limits established in this policy.
2. Purchases, contracts, change orders, invoices, or other expenditures shall not be divided, split, or otherwise structured
to circumvent approval authority thresholds.
3. Any delegation of signature authority must be documented in writing and approved by the City Manager.
4. The City Manager may require additional review or approval for sensitive, high-risk, or unusual transactions regardless of
dollar amount.
5. Signature authority under this policy does not supersede any approval requirements established by City Charter, City
Code, state law, purchasing policy, budget authorization, or City Council action.
6. All approvals must be supported by sufficient documentation demonstrating compliance with applicable purchasing,
contracting, and budgetary requirements.
XXVIII. Surplus and Excess Property Disposal
City of The Colony Finance Department
6800 Main Street, The Colony, TX 75056 • 972-624-3145
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Purpose
The purpose of this section is to establish a standardized process for the identification, disposition, sale, transfer, and
disposal of surplus or excess City -owned property in a manner that promotes transparency, accountability, efficiency,
and compliance with applicable laws and City policies.
Definitions
Surplus Property — Any City -owned property, equipment, material, vehicle, furniture, technology asset, or other item that is
no longer needed, used, or economically useful to the department to which it was assigned.
Excess Property—Any City -owned property determined to be in excess of operational needs, including items that have been
replaced, become obsolete, are non-functional, or are no longer required for service delivery.
Authority
The City Manager, or designee, shall have the ultimate authority to determine the appropriate disposition method for all
surplus or excess property owned by the City.
The Purchasing Division shall be responsible for coordinating and administering the disposition process for surplus and
excess property in accordance with this policy.
Identification of Surplus Property
Departments shall periodically review City -owned property assigned to their department and identify items that are
surplus or excess to operational needs.
Prior to disposal, departments shall complete a Surplus / Excess Property Disposal Request Form and submit the form to
the Purchasing Division. The form shall include, at a minimum:
• Description of the property
• Asset tag, serial number, or VIN if applicable
• Condition of the property
• Estimated value
• Reason for disposal
• Any special handling requirements
• Confirmation regarding data storage or data wiping requirements for technology assets
• Department Head approval
Public Sales and Auctions
Whenever practical, surplus or excess property shall be sold through a public and competitive process, including online
auction platforms approved by the City.
The Purchasing Division shall manage the sale or auction process, including listing preparation, photographs, bidder
coordination, documentation, and final disposition.
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6800 Main Street, The Colony, TX 75056 • 972-624-3145
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City employees may purchase surplus or excess City property only through the same public sale or auction process
available to the general public.
Technology and Data Security
Departments shall coordinate with the Information Technology Division, when applicable, to ensure all data is properly
removed or destroyed from electronic devices prior to disposition.
No technology asset containing confidential, sensitive, or protected information shall be released for sale or disposal
until appropriate data destruction procedures have been completed.
Recordkeeping
The Purchasing Division shall maintain records related to the disposition of surplus and excess property, including:
• Disposal request forms
• Sale or auction documentation
• Final disposition method
• Revenue received
• Supporting approvals
Records shall be retained in accordance with the City's records retention requirements and applicable law.
Compliance
All departments shall comply with this policy when disposing of City -owned property. Unauthorized disposal, sale,
transfer, or removal of City property is prohibited.
City of The Colony Finance Department
6800 Main Street, The Colony, TX 75056 • 972-624-3145