05-12-26 City Council Workshop Packet

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16 216348v2 Electronic Bidding Municipalities now have authority for the following procedures related to purchases and sales: 1. Reverse Auction Purchases—Minn. Stat. § 471.345, subd. 16 i. municipality may contract to purchase supplies, materials, and equipment (but not services), ii. using an electronic purchasing process in which vendors compete to provide the supplies, materials, or equipment at the lowest price in an open and interactive environment. 2. Electronic Sales—Minn. Stat. § 471.345, subd. 17 i. municipality may contract to sell supplies, materials, and equipment which is surplus, obsolete, or used, ii. using an electronic selling process in which purchasers compete to purchase the supplies, materials, or equipment at the highest purchase price in an open and interactive environment. The Cooperative Purchasing Venture (“State Contract”) As part of marketing, vendors sometimes say cities can purchase from them without bidding because they are on the “state contract” or they will sell at the state contract price. Cities should beware of this approach. The real name of the state contract is the Cooperative Purchasing Venture. It is a members-only joint powers program operated by the Minnesota Department of Administration. To purchase through it, cities must join. Cities cannot avoid the normal bidding requirements by simply purchasing at the state contract price or from a state contract vendor without joining the program and following its requirements. For additional information, visit the Cooperative Purchasing Venture website at http://www.mmd.admin.state.mn.us/cpv2.htm. Cooperative Purchasing A municipality may contract for the purchase of supplies, materials, or equipment without regard to the competitive bidding requirements of Minnesota State Statute Section 371.345 (as described in this policy) if the purchase is through a national municipal association’s purchasing alliance or cooperative created by a joint powers agreement that purchases items from more than one source on the basis of competitive bids or competitive quotations. Responsible Contractor Minimum Requirements The Responsible Contractor Requirements apply to construction contracts over $50,000 that are awarded on the basis of bidding or “best value.” The threshold for formal bidding is $175,000 and the best value alternative is available for contracts over $20,000. Between $50,000 and $175,000 the City does not have to use the formal bidding process, however if the City does use formal bidding or “best value” procurement for these contracts they will have to comply with the Responsible Contractor Requirements.