05-12-26 City Council Workshop Packet

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18 216348v2 Withholding Certificates Before a city makes the final payment to a contractor under a contract requiring the employment of employees for wages, it must make sure the contractor and any subcontractors have complied with withholding tax laws. Contractors and subcontractors show compliance by submitting a withholding affidavit to the Minnesota Department of Revenue. This can be done electronically or by mailing a completed Form IC134, “Withholding Affidavit for Contractors.” If a contractor or subcontractor has withheld taxes as required, the Department of Revenue will return an electronic confirmation or sign and return the Form IC134, certifying compliance. Exceptions to Competitive Bidding The following are some of the most common exceptions to the competitive-bidding requirements: • See Quick Reference Table on Page 2 of the Purchasing Policy. • Non-contracts. An agreement that does not meet the definition of a contract under the competitive-bidding law is exempt from the competitive-bidding requirements. For example, an agreement in which a company supplied a special scoreboard system in exchange for the right to sell or lease advertising space on it was found to be exempt from the competitive-bidding requirements because it was not a contract for “materials, supplies or equipment.” Likewise, contracts for refuse hauling and janitorial services were also found to be exempt from the competitive-bidding requirements because they were not considered to be contracts within the definition of the competitive-bidding law. • Electronic reverse-auction purchases. Cities may use an electronic reverse-auction procedure to contract for the purchase of supplies, materials, and equipment regardless of their cost. This procedure allows vendors to compete to provide the requested supplies, materials, or equipment at the lowest selling price in an open and interactive electronic environment. • Electronic sales of surplus supplies, materials, and equipment. Cities may contract to sell supplies, materials, and equipment, which are surplus, obsolete, or unused, regardless of their cost, using an electronic selling process in which purchasers compete to offer the highest purchase price in an open and interactive environment. • Best value contracting. Under certain circumstances, cities may use best value contracting for construction projects. Best value contracting requires cities to consider two factors as part of a request-for-proposals process: price and performance. There are additional factors that may be considered. • Intergovernmental contracts. Contracts between governmental entities for the sale, lease, or purchase of real or personal property between federal, state, or political subdivisions. • Professional services contracts. Professional services, such as those provided by doctors, engineers, lawyers, architects, accountants, and other services requiring technical, scientific, or professional training. • Some group-insurance contracts. Group insurance for 25 or more employees. This type of insurance must be solicited through requests for proposals. The request for proposals must be in writing and must include the coverage to be provided, the criteria for evaluation of carrier proposals, and the aggregate-claims records for the appropriate period. The request for proposals must be published in a newspaper or trade journal for at least 21 days before the final day for submitting proposals. • Real estate contracts. The purchase or sale of real property is generally not required to be competitively bid. • Emergency contracts. The emergency-management statutes give cities the ability to declare