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PURCHASING AND SPENDING AUTHORITY POLICY
<br />
<br />CITY OF RICHFIELD
<br />
<br />CITY POLICY
<br />
<br />DATE: January 10, 2023
<br />
<br />SUBJECT: Purchasing and Spending Authority Policy
<br />
<br />The purpose of this policy is to establish uniform and consistent guidelines with respect to purchasing and
<br />the authority to purchase on behalf of the City within the parameters of the Uniform Municipal Contracting
<br />Law, Minnesota State Statute Section 471.345. Additional resources from the League of Minnesota Cities,
<br />related to purchasing and spending authority, is contained in:
<br /> Information Memo - Competitive Bidding Requirements in Cities
<br />
<br /> Handbook for Minnesota Cities - Chapter 22 Expenditures, Purchasing and Contracts
<br />
<br />Uniform Municipal Contracting Law (Minn. Stat. Sec. 471.345)
<br />
<br />The Uniform Municipal Contracting Law sets out procedures that cities must follow for contracts to sell,
<br />purchase or rent supplies, materials, or equipment, or to construct, alter, repair or maintain real or personal
<br />property. The procedures to follow depend on the estimated amount of the contract and estimates should
<br />be reasonable. (e.g. if a city asks for quotations because it estimates the value of a contract will be below
<br />the bid threshold but all of the quotations are substantially over the threshold, the city should solicit formal
<br />bids.)
<br />
<br />A. Contracts defined. A “contract” means an agreement entered into by a city for the sale or purchase
<br />of supplies, materials, equipment or the rental thereof, or the construction, alteration, repair or
<br />maintenance of real or personal property. (Minn. Stat. Sec. 471.345.2) All City contracts should be
<br />in writing regardless of their nature or the dollar amount involved.
<br />B. Contracts or purchases over $175,000. If the amount of the contract is estimated to exceed
<br />$175,000, sealed bids shall be solicited by public notice in the manner and subject to the law
<br />governing contracts or purchases by the City of Richfield. (Minn. Stat. Sec. 471.345.3) The
<br />requirement that the successful bidder be “responsible” protects cities from having to choose
<br />unqualified or unscrupulous low bidders. It allows a city council to consider factors such as the
<br />bidder’s financial responsibility, integrity, skill and ability, and the likelihood that the bidder will do
<br />satisfactory work. A city can even include evaluation criteria for “responsible” bidders in the bid
<br />specifications.
<br />C. Contracts over $175,000; best value alternative. As an alternative to the procurement method
<br />described in paragraph A, cities may award a contract for construction, alteration, repair, or
<br />maintenance work to the vendor or contractor offering the best value under a request for proposals
<br />as described above and in state statutes section 16C.28, subdivision 1, paragraph (a), clause (2),
<br />and paragraph (c). (Minn. Stat. Sec. 471.345.3a)
<br />D. Contracts or purchases from $25,000 to $175,000. If the amount of the contract or purchase is
<br />estimated to exceed $25,000 but not to exceed $175,000, the contract or purchase may be made
<br />either upon sealed bids or by direct negotiation, by obtaining two or more quotations for the
<br />purchase or sale when possible, and without advertising for bids or otherwise complying with the
<br />requirements of competitive bidding. All quotations must be kept on file for a period of one year
<br />after receipt thereof. (Minn. Stat. Sec. 471.345.4)
<br />E. Contracts from $25,000 to $175,000; best value alternative. As an alternative to the
<br />procurement method described in paragraph C, cities may award a contract for construction,
<br />alteration, repair, or maintenance work to the vendor or contractor offering the best value under a
<br />request for proposals as described above, and in state statutes section 16C.28, subdivision 1,
<br />paragraph (a), clause (2), and paragraph (c). (Minn. Stat. Sec. 471.345.4a)
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