Section 3-4-3 Source Selection and Contract Formation

3-4-3 Source Selection and Contract Formation.

A. Definitions. In this chapter unless the context requires otherwise:

Best value means a technique in the competitive sealed bid process which permits the evaluation of objective criteria to determine the best overall value to the Town.

Discussions means communication with an offeror, bidder or respondent for the purpose of:

1. Eliminating minor irregularities, informalities, or apparent clerical mistakes in the offer or response;

2. Clarifying any offer or response to assure full understanding of, and responsiveness to, solicitation requirements;

3. Resolving minor variations in contract terms and conditions; or

4. Establishing the competency or financial stability of any offeror, bidder or respondent.

Invitation for bid means all documents, written or electronic, whether attached or incorporated by reference, which are used for soliciting bids in accordance with the procedures prescribed in this article.

Negotiations means an exchange of information or any form of cooperation during which the offeror or respondent and the Town may alter or otherwise change the conditions, terms, and price, unless prohibited, of the proposed contract.

Oro Valley business means a business which legally operates within the Town limits, has a current Oro Valley business license, and pays any applicable local business privilege tax to the Town of Oro Valley.

Request for proposals means all documents, written or electronic, whether attached or incorporated by reference, which are used for soliciting proposals in accordance with procedures prescribed in this article.

Request for qualifications means all documents, written or electronic, whether attached or incorporated by reference, which are used for soliciting responses from qualified respondents in accordance with this article.

Responsible bidder, offeror, or respondent means a person who has the capability to perform the contract requirements and the integrity and reliability which will assure good faith performance.

Responsive bidder means a person who submits a bid which conforms in all material respects to the invitation for bids.

Solicitation means an invitation for bids, a request for technical proposals, a request for proposals, a request for qualifications, a request for quotations, or any other invitation or request by which the Town invites a person to participate in a procurement.

B. Methods of Source Selection. All Town procurements shall be made in accordance with one of the source selection methods identified in this article.

i. Competitive sealed bids shall be solicited through an invitation for bids. The invitation for bids shall include specifications and any applicable evaluation criteria. Contractual terms and conditions may be included within the solicitation document or incorporated by reference.

ii. A prequalification process may be conducted prior to the issuance of an invitation for bids in order to establish a list of qualified bidders. In the event a prequalification process is used, the Procurement Agent shall only consider bids that are submitted from prequalified bidders.

b. Public Notice. Notice of the invitation for bids shall be published in a newspaper of general circulation or electronically posted and the invitation for bids shall be available for public inspection not less than fourteen (14) days prior to the date set forth therein for the opening of bids. A shorter time may be deemed necessary for a particular procurement as determined by the Procurement Agent. The public notice shall state the place, date, and time of bid opening.

c. Late Bids. A bid is late if it is received at the location designated in the invitation for bids after the time and date set for bid opening. The Town’s clock is the governing clock. A late bid shall be rejected. A late bid shall not be opened except for, if necessary, identification purposes. Such bids may be returned to the bidder. Bidders submitting bids that are rejected as late shall be so notified.

d. Bid Opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. The name of each bidder and the amount of each bid, as well as other relevant information as the Procurement Agent deems appropriate shall be recorded. Unless otherwise determined by the Procurement Agent, this record shall be open to public inspection. Unless otherwise determined by the Procurement Agent, the bids shall not be opened for public inspection until after a contract is awarded. After a notice of intent to award is issued, or in the absence of a notice of intent to award, after final execution of the contract, the bids shall be available for public inspection, except to the extent that the withholding of information is permitted or required by law. If the bidder designates a portion of its bid as confidential, it shall isolate and identify in writing the confidential portions in accordance with this article.

e. Bid Acceptance and Bid Evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this article. Bids shall be evaluated based on the requirements set forth in the invitations for bids, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that is not set forth in the invitation for bids.

f. Correction or Withdrawal of Bids; Cancellation of Awards.

i. Correction or withdrawal of inadvertently erroneous bids before or after bid opening, or cancellation of awards or contracts based on such bid mistakes, may be permitted where appropriate. Mistakes discovered before bid opening may be modified or withdrawn by written notice received by the Town prior to the time set for bid opening.

ii. Mistakes discovered after bid opening may be modified or withdrawn only to the extent that the bidder can show by clear and convincing evidence that a mistake of a nonjudgmental character was made, the nature of the mistake, and the bid price actually intended. After bid opening, no changes in bid prices or other bid provisions prejudicial to the interest of the Town or fair competition shall be permitted. In lieu of bid correction, a bidder alleging a mistake may be permitted to withdraw its bid if:

(A) The mistake is clearly evident on the face of the bid document but the intended correct bid is not similarly evident; or

(B) The bidder submits evidence that clearly and convincingly demonstrates that a mistake was made.

(C) All decisions to permit the correction or withdrawal of bids, or to cancel awards based on bid mistakes, shall be supported by a written determination made by the Procurement Agent.

i. General. The contract shall be awarded by appropriate notice to the lowest responsible and responsive bidder whose bid conforms in all material respects to requirements and criteria set forth in the invitation for bids.

ii. Contract Award Based on Best Value. Contracts may be awarded on best-value analysis; provided, that the criteria for analysis were included in the invitation for bids in accordance with this article. The contract shall be awarded by appropriate written notice to the responsive, responsible bidder whose bid is determined to be the best value to the Town and that conforms in all material respects to requirements and criteria set forth in the invitation for bids.

iii. Consideration of Taxes in Competitive Sealed Bidding. In evaluating the bids, except for procurement of construction, and for purposes of determining the low bidder, the Procurement Agent shall not include the amount of applicable business privilege tax. The amount of a city’s business privilege tax shall not be included in the evaluation except in those instances in which the award is between an Oro Valley business and an Arizona-based, non-Oro Valley business. In this event, the applicable city business privilege tax shall be included in the non-Oro Valley bidder’s price for evaluation purposes only to determine the lowest bidder.

iv. Exceeding Available Funds. In the event the low responsive and responsible bid for a construction project exceeds available funds and such bid does not exceed such funds by more than five percent, the Procurement Agent is authorized, when time or economic considerations preclude resolicitation of work of a reduced scope, to negotiate an adjustment of the bid price with the low responsive and responsible bidder, in order to bring the bid within the amount of available funds.

v. Low Tie Bids. If there are two or more low responsive bids from responsible bidders that are identical in price and other evaluation criteria and that meet all the requirements and criteria set forth in the invitation for bids, award may be made by random selection in a manner prescribed by the Procurement Agent.

vi. Public Record. After the Town issues a notice of intent to award, or in the absence of a notice of intent to award upon final contract execution, the bids shall be available for public inspection, except to the extent that the withholding of information is permitted or required by law. If the bidder designates a portion of its bid as confidential, it shall isolate and identify in writing the confidential portions in accordance with this article.

i. Competitive sealed proposals shall be solicited through a request for proposals. The request for proposals shall include a scope of work and any applicable evaluation criteria. Contractual terms and conditions may be included within the solicitation document or incorporated by reference.

ii. A prequalification process may be conducted prior to the issuance of a request for proposals in order to establish a list of qualified offerors. In the event a prequalification process is used, the Procurement Agent shall only consider proposals that are submitted from prequalified offerors.

b. Public Notice. Notice of the request for proposals for bids shall be published in a newspaper of general circulation or electronically posted and the request for proposals shall be available for public inspection not less than fourteen (14) days prior to the date set forth therein for the opening of bids. A shorter time may be deemed necessary for a particular procurement as determined by the Procurement Agent. The public notice shall state the place, date, and time of proposal opening.

c. Late Proposals. A proposal is late if it is received at the location designated in the request for proposals after the time and date set for proposal opening. The Town’s clock is the governing clock. A late proposal shall be rejected. A late proposal shall not be opened except for, if necessary, identification purposes. Such proposals may be returned to the bidder. Offerors submitting proposals that are rejected as late shall be so notified.

d. Receipt of Proposals. Proposals shall not be opened publicly. No proposals shall be handled as to permit disclosure of the contents of any proposal to competing offerors. Proposals shall be open for public inspection after a notice of intent to award is issued, or in the absence of a notice of intent to award, after final execution of the contract, except to the extent that the withholding of information is permitted or required by law. If the offeror designates a portion of its proposal as confidential, it shall isolate and identify in writing the confidential portions in accordance with this article.

e. Evaluation of Proposals. The request for proposals shall state the criteria to be used in the evaluation of the proposals and shall include their relative importance. Specific numerical weighting is not required.

f. Discussion with Offerors. Discussions may be conducted with offerors.

g. Negotiations with Offerors and Revisions to Proposals. Negotiations may be conducted with offerors. Offerors shall be accorded fair and equal treatment in conducting negotiations and there shall be no disclosure of any information derived from proposals submitted by competing offerors.

i. Concurrent Negotiations. Negotiations may be conducted concurrently with offerors for the purpose of determining source selection and/or contract award.

ii. Exclusive Negotiations. Exclusive negotiations may be conducted with the offeror whose proposal is determined in the source selection process to be most advantageous to the Town. Exclusive negotiations may be conducted subsequent to concurrent negotiations or may be conducted without requiring previous concurrent negotiations. If exclusive negotiations are conducted and an agreement is not reached, the Town may enter into exclusive negotiations with the next highest ranked offeror without the need to repeat the formal solicitation process.

h. Contract Award. Contract award shall be made by the Procurement Agent to the responsible offeror whose proposal is determined in writing to be the most advantageous to the Town taking into consideration the evaluation criteria set forth in the request for proposals. The contract file shall contain the basis on which the award is made.

a. Authority. For the purpose of procuring the services of legal counsel, as defined by the laws of the state, contracts for the services of legal counsel shall be awarded with the authorization of the Town Attorney and the Town Manager except as otherwise provided by law.

b. Conditions for Use. Unless determined by the Town Attorney and Town Manager that direct selection is in the best interest of the Town, the services of legal counsel shall be procured in accordance with this article.

4. Small Purchases. Any contract not exceeding the formal solicitation threshold as established under the Arizona Procurement Code may be made by the Procurement Agent in accordance with the small purchase procedures authorized in this article. Contract requirements shall not be artificially divided so as to constitute a small purchase under this article.

a. Small Purchases Greater than Two Thousand Five Hundred Dollars ($2,500). Insofar as it is practical for small purchases in excess of two thousand five hundred dollars ($2,500) but less than the formal solicitation threshold as established under the Arizona Procurement Code, no less than three (3) businesses shall be solicited to submit quotations. Award shall be made to the responsible bidder submitting the quotation, which is most advantageous to the Town and conforms in all material respects to the solicitation. The names of the businesses submitting quotations, and the date and amount of each quotation, shall be maintained as a public record.

b. Small Purchases Two Thousand Five Hundred Dollars ($2,500) or Less. The Procurement Agent shall adopt operational procedures for making small purchases of two thousand five hundred dollars ($2,500) or less.

5. Sole Source Procurement. Notwithstanding any other provisions of this article, a contract may be awarded without competition when the Procurement Agent determines in writing, after conducting a good faith review of available sources, that there is only one source for the required material, service, or construction item. The using agency requesting a sole source procurement shall provide written evidence to support a sole source determination. The Procurement Agent may require that negotiations are conducted as to price, delivery, and terms. The Procurement Agent may require the submission of cost or pricing data in connection with an award under this section. Sole source procurement shall be avoided, except when no reasonable alternative sources exist.

6. Emergency Procurements. Notwithstanding any other provisions of this article, the Procurement Agent may make or authorize others to make emergency procurements when there exists a threat to public health, welfare, or safety; provided, that such emergency procurements shall be made with such competition as is practicable under the circumstances. An emergency procurement shall be limited to those materials, services, or construction necessary to satisfy the emergency need. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file.

7. Special Procurements. Notwithstanding any other provisions of this article, the Procurement Agent may make or authorize others to make procurements above the small purchase amount specified in this article when, due to unusual or special circumstances, it would be in the best interest of the Town to accomplish the procurement without compliance with other methods of source selection contained in this article. The using agency requesting a special procurement shall provide written evidence to support a special procurement determination. Any special procurement under this section shall be limited to those materials, services, or construction necessary to satisfy the Town’s need and shall be made with sound fiscal discretion. A written determination of the basis for the special procurement and for the selection of the particular contractor shall be maintained as public record.

C. Cancellation or Rejection of Solicitations. An invitation for bids, a request for proposals, a request for qualifications or other solicitation may be cancelled, or any or all bids, proposals or statements of qualifications may be rejected in whole or in part as may be specified in the solicitation, when it is for good cause and in the best interest of the Town. The reason for cancellation or rejection shall be made part of the contract file.

Notice of cancellation shall be publicly posted. The notice shall identify the solicitation, explain the reason for cancellation, and where appropriate, explain that an opportunity will be given to compete on any resolicitation or any future procurement of similar items. Reason for rejection shall be provided upon request to the unsuccessful bidder, offeror or respondent.

1. Findings of Nonresponsibility. If a bidder, offeror or respondent who otherwise would have been awarded a contract is found nonresponsible, a written finding of nonresponsibility, setting forth the basis of the finding, shall be prepared by the Procurement Agent or designee. The unreasonable failure of a bidder, offeror or respondent to promptly supply information in connection with an inquiry with respect to responsibility may be grounds for a finding of nonresponsibility with respect to such bidder or offeror. The written finding shall be made part of the contract file and be made a public record.

Factors to be considered in determining if a prospective contractor is responsible include but are not limited to:

a. The proposed bidder’s, offeror’s or respondent’s financial, physical, personnel or other resources, including subcontracts;

b. The proposed bidder’s, offeror’s or respondent’s record of performance and integrity; and

c. Whether the proposed bidder, offeror or respondent is qualified legally to contract with the Town.

2. Right of Nondisclosure. Confidential information furnished by a bidder, offeror or respondent pursuant to this section shall not be disclosed by the Town or using agency, without prior written consent by the bidder, offeror or respondent.

3. Bid and Contract Security, Material or Service Contracts. The Procurement Agent may require the submission of security to guarantee faithful bid and contract performance. In determining the amount and type of security required for each contract, the Procurement Agent shall consider the nature of the performance and the need for future protection to the Town. The requirement for security must be included in the solicitation. Failure to submit security in the amount and type of security required may result in the rejection of the bid or proposal.

E. Types of Contracts. Subject to the limitations of this article, any type of contract which will promote the best interests of this Town may be used.

F. Approval of Accounting System. The Procurement Agent may require that the proposed contractor’s accounting system is adequate to allocate costs in accordance with generally accepted cost accounting principles prior to award of a contract.

G. Multi-Year Contracts. Unless otherwise provided by law, a contract for materials, services or construction may be entered into for any period of time deemed to be in the best interest of the Town, if the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first fiscal period at the time of contracting. Payment and performance obligations for succeeding fiscal periods are subject to the availability and appropriation of funds.

H. Right to Inspect. The Town may, at reasonable times, inspect the part of the plant or place of business of a contractor, consultant or any subcontractor or subconsultant that is related to the performance of any contract awarded or to be awarded by the Town.

I. Right to Audit Records. The Town may, at reasonable times and places, audit the books and records of any person who submits cost or pricing data as provided in this article to the extent that the books and records relate to the cost or pricing data. Any person who is awarded a contract, change order or contract modification for which cost or pricing data is required shall maintain the books and records that relate to the cost or pricing data for three (3) years from the date of final payment under the contract, unless otherwise specified in the contract.

The Town is entitled to audit the books and records of a contractor, consultant or any subcontractor or subconsultant under any contract or subcontract to the extent that the books and records relate to the performance of the contract or subcontract. The books and records shall be maintained by the contractor for a period of three (3) years from the date of final payment under the prime contractor or consultant, and by the subcontractor or subconsultant for a period of three (3) years from the date of final payment under the subcontract, unless otherwise specified in the contract.

J. Reporting of Anticompetitive Practices. When for any reason collusion or other anticompetitive practices are suspected among any bidders or offerors, a notice of the relevant facts shall be transmitted to the Procurement Agent and the Town Attorney.

K. Retention of Procurement Records. All procurement records shall be retained and disposed of in accordance with records retention guidelines and schedules approved by the Town Clerk. ((O)08-03, 02/20/2008)