THE CITY COUNCIL OF THE CITY OF SUNNYVALE DOES ORDAIN AS FOLLOWS:

SECTION 1. CHAPTER 2.08 REPEALED. The existing Chapter 2.08 entitled "Purchasing System" of the Sunnyvale Municipal Code is hereby repealed.

SECTION 2. CHAPTER 2.07 ADDED. A new Chapter 2.07 entitled "Purchase, Sale or Lease of Real Property" is hereby added to the Sunnyvale Municipal Code as set forth in Exhibit "A."

SECTION 3. CHAPTER 2.08 ADDED. A new Chapter 2.08 entitled "Purchases of Goods and Services" is hereby added to the Sunnyvale Municipal Code as set forth in Exhibit "B."

SECTION 4. CHAPTER 2.09 ADDED. A new Chapter 2.09 entitled "Public Works Contracting" is hereby added to the Sunnyvale Municipal Code as set forth in Exhibit "C."

SECTION 5. EXEMPTION FROM CEQA. The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15061(b)(3), that this ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a Project which has the potential for causing a significant effect on the environment. The Council therefore directs that a Notice of Exemption be filed with the Santa Clara County Clerk in accordance with Section 14 of the Sunnyvale Guidelines for the implementation of CEQA adopted by Resolution No. 193-86.

SECTION 6. EFFECTIVE DATE. This ordinance shall be in full force and effect January 15, 2000.

SECTION 7. POSTING AND PUBLICATION. The City Clerk is directed to cause copies of this ordinance to be posted in three (3) prominent places in the City of Sunnyvale and to cause publication once in The Sun, the official newspaper of the City of Sunnyvale, of a notice setting forth the date of adoption, the title of this ordinance, and a list of places where copies of this ordinance are posted, within fifteen (15) days after adoption of this ordinance.

Introduced at a regular meeting of the City Council held December 7, 1999, and adopted as an ordinance of the City of Sunnyvale at a regular meeting of the City Council held on December 14, 1999, by following vote:

AYES:

NOES:

ABSENT:

(SEAL)

This chapter shall be known and may be cited and referred to as the "Real Property Ordinance of the City of Sunnyvale."

The purpose of this chapter is to set forth who has authority to purchase, sell or lease real property on behalf of the city.

(a) The city council shall be the awarding authority for all purchases, sales or leases of real property for the city where the purchase or sales price or lease cost exceeds $75,000.

(b) The city manager shall be the awarding authority for all purchases, sales or leases of real property for the city where the purchase or sales price or lease cost is $75,000 or less, or where the lease results in revenue to the city and is for a period less than or equal to fifty-five years.

(a) The city council may enter into a lease of city property for a term in excess of fifty-five years pursuant to the procedures set forth in this section. This section is enacted pursuant to California Government Code Section 37380 for the purpose of establishing alternate procedures thereto and exempting the city from the provisions of subsections (b)(2), (b)(3) and (b)(4) thereof. Except with respect to leases in excess of fifty-five years, the provisions of this section shall not be deemed in any way to restrict the city's authority to enter into other forms of leases.

(b) A lease in excess of fifty-five years of property owned, held or controlled by the city, may be authorized by the city council in accordance with the following procedures:

(1) Any lease entered into pursuant to this section shall be authorized by resolution of the city council.

(2) Prior to adopting a resolution authorizing a lease, the city council shall hold a public hearing. Notice of the time and place of the hearing shall be published once not less than six days prior to the public hearing, in the official newspaper of the city.

(3) The city shall not be required to engage in a competitive bid process for the award of such lease; provided, that at the time of adopting the resolution authorizing the lease the city council makes a determination that entering the lease without engaging in a competitive bid process is in the best interests of the city.

(4) Any such lease shall be subject to periodic review by the city and shall take into consideration the then market conditions. Pursuant to California Government Code Section 37380(b)(1), the city council hereby establishes that the lease provisions which will periodically be reviewed, at a minimum, shall be those provisions specifying the rent to be paid pursuant to the lease, and such other provisions as may be indicated by the city council at the time of authorizing the lease. The periodic reviews shall occur in accordance with a schedule to be contained in the lease. The periodic review may be in the form of either an express review of the terms by the city council or its designee, or in the form of a procedure contained in the lease for automatic adjustments of the terms in response to market conditions. It is the intent of this provision that inclusion of inflationary adjustments, cost of living adjustments, reappraisals or other similar forms of automatic adjustments shall satisfy the requirements of California Government Code Section 37380(b)(1), without the necessity of a discretionary review by a city officer.

2.08.010. Title.

This chapter shall be known and may be cited and referred to as the "Purchasing Ordinance of the City of Sunnyvale."

The purposes of this chapter are to define the centralized purchasing system of the city for goods and services authorized and directed by section 1317 of the city charter, to provide for the fair and equitable treatment of all persons involved in the purchasing process, to obtain the highest possible value in exchange for public funds, and to safeguard the quality and integrity of the purchasing system.

For the purposes of this chapter, the following definitions apply:

(a) Bid or Proposal Documents. The documents, including their attachments and addenda, which set forth instructions to bidders or proposers, and are disseminated for the purpose of soliciting bids or proposals.

(b) City Employee. An individual who performs services for the city in the capacity of an elected or appointed official, or as a compensated employee of the city or of a temporary services agency retained by the city. "City employee" does not include independent contractors.

(c) Contract. Agreements, regardless of what they may be labeled, between the city and one or more other parties for the purchase or disposition of goods and/or services.

(d) Contractor. Any person who has entered into an agreement with the city for the provision or disposition of goods and/or services.

(e) End User. The city of Sunnyvale or any component thereof requiring goods and/or services.

(f) Financial Interest.

1) Ownership of any interest or involvement in any relationship from which, or as a result of which, a person has received compensation within the past year, or is entitled to, or is currently receiving compensation;

(2) Ownership, whether wholly or in part, of any property or business; or

(3) Status as an officer, director, trustee, partner, employee, or manager of a business.

(g) Goods. Articles moveable at the time of sale, including but not limited to equipment, supplies and materials.

(h) Gratuity. A gift, payment, loan, advance, deposit of money, or service, presented or promised in return for or in anticipation of favorable consideration in the procurement process. "Gratuity" does not include the compensation paid by or due from the city or from a temporary service agency under contract with the city to an employee in connection with the employee's services for the city.

(i) Immediate Family. Any spouse, child, stepchild, parent or stepparent of a city employee. The relationship of parent to child includes both natural and adoptive relationships.

(j) Local Business. A business entity with one or more fixed offices and/or locally taxable distribution points within the boundaries of the city of Sunnyvale which holds a current and valid city business license with a Sunnyvale business street address.

(k) Maintenance and Repair Services. Services intended to preserve and/or restore a public work to a clean, safe, efficient and/or continually usable condition. Maintenance and repair services may include, but are not limited to: carpentry, electrical, painting, plumbing, glazing and other craftwork to preserve a facility in the condition for which it was intended; repairs, cleaning and other operations on machinery and other equipment permanently attached to a facility as fixtures; the mowing, pruning, and trimming of lawns, grass, trees, shrubs, bushes and hedges; and the regular removal or relocation of by-products or waste products accumulated at city facilities as the result of ongoing environmental processes.

(l) Person. Any individual, partnership, limited partnership, association, corporation, labor union, committee, club, or governmental, public or quasi-public entity.

(m) Procurement. The acquisition of goods and/or services by the city, including but not limited to purchasing or leasing, and all functions and procedures pertaining to such acquisitions.

(n) Professional Services. Services, which involve the exercise of professional discretion and independent judgment based on an advanced or specialized knowledge, expertise or training gained by formal studies or experience. Such services include, but are not limited to, those provided by appraisers, architects, attorneys, engineers, instructors, insurance advisors, physicians and other specialized consultants.

(o) Purchasing Officer. The person designated by the city manager as the purchasing officer of the city, or an individual specifically authorized by the purchasing officer to act on his or her behalf.

(p) Responsible Bidder. A bidder determined by the awarding authority:

(1) To have the ability, capacity, experience and skill to provide the goods and/or services in accordance with bid specifications;

(2) To have the ability to provide the goods and/or services promptly, or within the time specified, without delay;

(3) To have equipment, facilities and resources of such capacity and location to enable the bidder to provide the goods and/or services;

(4) To be able to provide future maintenance, repair, parts and service for the use of the goods purchased, if appropriate;

(5) To have a record of satisfactory or better performance under prior contracts with the city and other purchasers where such bidder has previously been awarded such contracts;

(6) To have complied with laws, regulations, guidelines and orders governing prior or existing contracts performed by the bidder, if applicable;

(q) Responsive Bidder. A bidder determined by the purchasing officer to have submitted a bid or proposal which conforms in all material respects to the requirements of the bid or proposal documents.

(r) Services. Work performed or labor, time and effort expended by an independent contractor.

(s) Sole Source. Contracts for which the city’s purchasing officer has determined, after conducting a good faith review of available products and sources, that the city’s requirements can be met solely by a single patented, copyrighted or proprietary article or process available from a single source. Examples of acceptable sole source purchases are equipment for which there is no comparable competitive product, a component or replacement part for which there is no commercially available substitute and which can be obtained only from the manufacturer, and an item where compatibility with items in use by the city is the overriding consideration.

(t) Specifications. A description of the physical or functional characteristics or of the nature of the required goods and/or services.

(u) Surplus Personal Property. Goods owned by the city which are no longer needed or which are obsolete or unserviceable, property that is a by-product (scrap metal, used tires and oil, etc.), or any unclaimed, seized or abandoned personal property in the possession or custody of the department of public safety which may be legally disposed of by the city.

(a) End User. The end user shall:

(1) Identify its procurement needs and the availability of funding.

(2) Submit to the purchasing officer specifications for the required goods and/or services.

(3) Participate in the evaluation of bids and proposals, as required.

(4) Inspect goods delivered and services performed to determine conformity with the requirements set forth in the bid or proposal documents and with contractual obligations, authorize payment for conforming goods and/or services and notify the purchasing officer of nonconforming goods and/or services.

(5) Report to the purchasing officer all surplus property available for disposal.

(b) Purchasing Officer. The purchasing officer shall be responsible for the procurement of goods and/or services for the city in accordance with the provisions of this chapter. No procurement of goods and/or services shall be made by any city employee independently of the purchasing officer except in cases of emergency, unless otherwise authorized in writing by the city manager. The purchasing officer shall:

(1) Prepare and recommend to the city manager operational procedures and forms for the procurement of goods and/or services in cooperation with the end users and for the disposal of surplus personal property.

(2) Procure or supervise the procurement of all goods and/or services needed in coordination with end user.

(3) Process the contracts awarded.

(4) Whenever possible, establish standardized specifications and consolidation of requirements for goods and/or services required by two or more end users.

(5) Determine the types and amounts of bid security and any performance security acceptable for city procurements.

(6) Exercise general supervision and control over inventories of goods maintained by the city.

(7) Sell or otherwise dispose of surplus personal property.

(c) City Manager. The city manager shall:

(1) Be the awarding authority for every procurement of goods and/or services for which the cost to the city is $50,000 or less in any one transaction.

(2) Be the awarding authority for every procurement of goods and/or services, the cost of which will be fully paid or reimbursed to the city, regardless of amount.

(3) Review the results of all formal competitive bid and proposal solicitations for which the city council is the awarding authority and make recommendations to the city council as to the action to be taken.

(4) Approve methods of procurement alternate to those described in this chapter, if appropriate, for use on an experimental basis and recommend to the city council additions, deletions or modification of the procurement methods authorized by Section 2.08.060.

(d) City Council. The city council shall be the awarding authority for every procurement of goods and/or services for which the cost to the city is greater than $50,000 in any one transaction.

The city manager, after consultation with the director of finance, may delegate authority to procure certain goods and/or services to city employees other than the purchasing officer, if such delegation is deemed necessary for the effective procurement of those items. Delegation shall be made in advance in writing by the city manager and filed with the city clerk and the director of finance.

2.08.060. Methods of procurement.

(a) Informal Competitive Bids or Proposals. Procurements anticipated to cost $50,000 or less in one transaction may be made by informal bid or proposal solicitations in accordance with the provisions of this chapter. Solicitations may be verbal or written, but bids must be in writing. Where possible, a minimum of three bidders should be solicited.

(b) Formal Competitive Bids. Procurements anticipated to cost more than $50,000 in one transaction shall be made by issuance of written invitations for bids. Bid documents include, at a minimum, the notice inviting bids; instructions to bidders; specifications describing the required goods and/or services; bid forms and schedules; any required bond forms and proposed contract terms and conditions.

(c) Formal Competitive Proposals. Procurements anticipated to cost more than $50,000 in one transaction may be made by issuance of written requests for proposals in which the city defines a situation for which it is seeking a solution. The solution may be in the form of goods, services or a combination of goods and services and may require exceptional technical knowledge or professional expertise beyond that available within the end user. The circumstances may require that a contract award be based on factors in addition to price. The purchasing officer may enter into discussions with proposers to achieve clarification, full understanding and responsiveness to the solicitation requirements, but neither the purchasing officer nor any other city employee shall disclose any information derived from proposals submitted by competing proposers prior to contract award or rejection, except to city employees directly responsible for the procurement.

(d) Competitive Negotiation. The purchasing officer may establish, and the bid or proposal documents shall clearly define in a competitive negotiation procurement a two-tiered process in which bids or proposals, as first received, constitute preliminary offers only. Subject to the purchasing officer’s judgment, the purchasing officer shall have the authority to enter into negotiations with those persons reasonably likely of being consider for selection for contract award. Following such negotiations, best and final bids or proposals will be accepted by the purchasing officer. Bidders or proposers shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of bids or proposals. During negotiation, there shall be no disclosure beyond the city staff evaluating the matter of any information derived from bids or proposals submitted by competing bidders or proposers. The contract award shall be made to the bidder or proposer whose bid or proposal offers the best value to the city, taking into consideration price and the evaluation criteria set forth in the bid or proposal documents.

(e) Small Procurements. Procurements, the cost of which are $5,000 or less in any one transaction, shall be made using simplified and cost effective operational procedures and forms without use of formal or informal bids. Requirements shall not be artificially divided so as to constitute a small purchase under this subsection.

(f) Alternative Methods of Procurement. Subject to the limitations of Section 2.08.070, the purchasing officer shall determine the method for each procurement as in the best interest of the city and in full compliance with this chapter. The purchasing officer may use methods of procurement not included in this section on an experimental basis. Such methods shall not inhibit fair and open competition and shall not compromise the integrity of the procurement process. The purchasing officer shall not use any such method unless it has been approved in advance in writing by the city manager and is not precluded by other requirements of this chapter or state law.

(a) Contracts for goods and/or services for which the cost to the city in one transaction will exceed $50,000 shall be let by formal competitive bidding or proposals pursuant to this chapter. Procurement requirements shall not be artificially divided so as to avoid the competitive bidding requirement.

(b) The following are exemptions to the competitive bidding requirements:

(1) Professional or specialized services;

(2) Emergency procurements, as defined in Section 2.08.190;

(3) Situations where solicitations of bids or proposals would for any reason be impractical, unavailing or impossible;

(4) Sole source goods or services;

(5) Insurance and bonds;

(6) Public library collection materials or services for the provision of public library collection materials or other books or periodicals;

(7) Procurements funded by grants, donations or gifts when the special conditions attached to the grants, donations or gifts require the procurement of particular goods and/or services;

(8) Goods and/or services obtained from or through agreement with any governmental, public or quasi-public entity.

(9) Works of art, entertainment or performance.

(10) Surplus personal property owned by another governmental, public or quasi-public entity.

(11) Membership dues, conventions, training, and travel arrangements.

(12) Advertisements in magazines, newspapers, or other media;

(13) Goods procured for resale to the public;

(14) Where competitive bids or proposals have been solicited and no bid or proposal has been received. In such a situation the city manager may proceed to have the services performed or the goods procured without further competitive bidding.

(c ) The purchasing officer shall conduct negotiations, as appropriate, as to price, delivery and terms and may require the submission of cost or pricing data in connection with the award of a contract which does not require competitive bidding.

(d) Nothing in this section shall preclude the solicitation of competitive bids or proposals, when possible.

When deemed necessary for an adequate understanding of requirements, the purchasing officer is authorized to require bidders or proposers to attend pre-bid conferences or site inspections prior to the time and date set for receipt of bids or proposals and to consider nonresponsive bidders or proposers not in attendance.

(a) A notice inviting sealed formal competitive bids or proposals shall be advertised using one or more methods designed to provide reasonable public notice in a manner which will permit current information to be disseminated widely.

(b) The notice shall specify the time on or before which bids or proposals will be received; where and with whom bids or proposals shall be filed; the date, time and place where and when bids or proposals will be publicly opened and the bids of each bidder declared.

(c) At the bidder’s request, and where city deems feasible, bid documents may be transmitted to the bidder over the Internet.

(a) Before Date and Time for Receipt of Bids. Bids or proposals which contain mistakes discovered by a bidder before the date and time for receipt of bids may be modified or withdrawn by written notice to the purchasing officer received prior to the deadline.

(b) After Date and Time for Receipt of Bids. A bidder may not change its bid or proposal after the date and time set for receipt of bids.

(c) Withdrawal of Bid. A bidder alleging a mistake in a bid or proposal may be permitted to withdraw its bid or proposal provided that it establishes the following to the satisfaction of the awarding authority:

(1) A mistake was made;

(2) The bidder gave written notice of the mistake, and the manner in which it occurred, to the purchasing officer within five calendar days following the deadline for receipt of bids;

(3) The mistake made the price materially different than the bidder intended it to be;

(4) The mistake was made in filling out the bid and not due to error in judgment or to carelessness in inspecting the site of the work or in reading the bid documents;

(5) If the awarding authority deems it to be in the best interest of the city, it may allow the lowest bidder to withdraw its bid and award a contract to the next lowest bidder. In the event that bid security was required and provided by the lowest bidder, the amount of the lowest bidder's bid security shall be applied to the difference between the lowest bid and the next lowest bid and the surplus, if any, shall be returned to the lowest bidder or the bidder's surety, as applicable.

(a) Receipt of Bids.

(1) Small Procurements. Bids of $5,000 or less may be submitted verbally provided that the names of all bidders and the date and amount of each bid is recorded by the purchasing officer and maintained as a public record.

(2) Informal Competitive Bids and Proposals. Bids and proposals which are submitted in response to informal competitive bid and proposal solicitations shall be in writing and may be transmitted to the purchasing officer by facsimile machine, by mail, electronically over the Internet, or by any other means of delivery. Bids or proposals received prior to the date and time designated in the solicitation documents shall be retained in confidence by the purchasing officer until the date and time set for the receipt of bids or proposals.

(3) Formal Competitive Bids and Proposals. Sealed bids and proposals submitted in response to formal competitive bid or proposal solicitations shall be received by the purchasing officer at a time, date and place designated in the bid or proposal documents.

(b) Public Opening. Formal competitive bids or proposals, timely received, will be publicly opened by the purchasing officer in the presence of one or more witnesses at the location designated in the bid notice. If members of the public are present, the names of those submitting bids and the aggregate bid pricing shall be read aloud at or shortly following the deadline for receipt of formal competitive bids except those involving competitive negotiation.

(c) Late Receipt. Formal competitive bids or proposals received after the deadline for receipt of bids shall not be accepted and shall be returned to the bidder unopened unless necessary for identification purposes. The purchasing officer shall submit written notification to the bidder stating what the deadline was, when the bid or proposal was actually received, and that it is being returned because it was received too late.

(d) No Receipt. If no bids or proposals are received in response to a competitive solicitation for goods and/or services, or if none of the bids or proposals meet the requirements as specified in the solicitation document, the purchasing officer may reissue the solicitation or the awarding authority may authorize the procurement of the required goods and/or services without further complying with competitive bidding requirements, or the city may cease the procurement. An authorization to procure without bidding shall be documented and become part of the procurement records available for public inspection.

(a) One Bid Received. In the event that a single bid or proposal is received, the purchasing officer shall have the authority to require the bidder or proposer to submit cost or pricing data to assist in determining if the price is reasonable. If the awarding authority determines that a bid price for goods and/or services is not reasonable, it may either reject the bid or it may authorize the purchasing officer to attempt to negotiate a reasonable price with the bidder or proposer, subject to the awarding authority’s acceptance. Negotiation shall be completed within a reasonable time, as specified by the awarding authority. Should such negotiation fail, the bid may be rejected.

(b) Tie Bids. In the event that an identical price is received from two or more responsive and responsible bidders, and in the judgement of the awarding authority the public interest will not be served by re-advertising for bids, the awarding authority may authorize the purchasing officer to determine the successful bidder by the casting of lots with the tie bidders in public at a date and time set by the purchasing officer.

(c) Irregularities. In considering bids or proposals for any goods and/or services contract, the awarding authority may waive, if it wishes to do so, minor defects or irregularities in the bids or proposals, provided that the discrepancy does not affect the bid or proposal amount or give the bidder or proposer an advantage over others.

Any person with whom the city has contracted to prepare, or assist in the preparation of, bid or proposal documents, is ineligible to submit a bid or proposal for the provision of the goods or the performance of the services so specified.

(a) Cancellation of Solicitations. The purchasing officer may cancel competitive bid or proposal solicitations before the date and time set for receipt of bids or proposals upon a written determination that such action is in the city’s best interest for reasons including, but not limited to any of the following:

(1) The city no longer requires the goods and/or services, as determined by the end user;

(2) The city no longer can reasonably expect to fund the procurement, as determined by the director of finance, city manager or city council;

(3) Proposed amendments to the solicitation would be of such magnitude that a new solicitation is desirable;

(b) Rejection of Bids. The city manager may reject, in whole or in part, bids or proposals received in response to informal competitive bid or proposal solicitations, and the city council may reject, in whole or in part, bids or proposals received in response to formal competitive bid or proposal solicitations. If all bids are rejected, the city has the discretion to readvertise.

(c) Records. The fact that a solicitation was cancelled or bid or proposal rejected shall be made part of the procurement records.

(a) Best Interest of City. The city may solicit for procurements by line item, in groups, in phases, or on an all or nothing basis. The city may reserve the right to award a contract to a single bidder or proposer for the entire procurement; to award a separate contract by line item, in groups, in phases, or on an all or nothing basis; or to award a contract for one or more similar goods and/or services to more than one bidder or proposer to ensure adequate delivery and/or service. Subject to the requirements of state and federal law, and the limitations of this chapter, the purchasing officer shall include in the contract such terms and conditions as will promote the best interest of the city.

(b) Term. A contract for goods and/or services may be entered into for any period of time deemed by the purchasing officer to be in the best interest of the city. A contract for goods and/or services for a specified period may provide the city with an option to renew for one or more specific periods, or with a right of renewal for one or more specific periods upon the mutual written consent of the city and the contractor. The term of the contract and options for renewal shall be clearly defined in the bid or proposal documents and funds must be available for the first fiscal period at the time of contracting. Payment and performance obligations for succeeding fiscal periods shall be subject to the availability and appropriation of funds therefor.

(c) Modification of Contracts. Modifications of contracts for goods and/or services shall be in writing and shall be issued in accordance with the terms of the original contract. No verbal contract modifications shall be held binding on the city. Contract modifications which result in an increase in the original contract amount must be authorized by the awarding authority, unless there is a provision in the contract otherwise allowing modification of the amount. Modifications to the amount may not result in a violation of the monetary thresholds set forth in this chapter. The city is not required to compensate the contractor for goods and/or services not approved by a written amendment.

Where it is necessary for an awarding authority to take formal action to award a contract, the contract shall not be considered as awarded absent the formal action being taken.

(a) Records Maintenance. The purchasing officer shall maintain records for each procurement which include, at a minimum, the procurement request from the end user; the bid or proposal documents for the procurement, if any; any and all bids or proposals received; the basis on which contract award is made; and a copy of any and all contracts awarded. Such records shall be maintained for a period of time in compliance with state law and the city’s records retention schedule and shall be available for public inspection during normal city business hours.

(b) Public Inspection. Informal and formal competitive bids not involving competitive negotiation shall be available for public inspection following the date and time set for receipt of bids. Informal and formal competitive proposals and formal competitive bids involving competitive negotiation shall be available for public inspection following contract award or rejection.

(a) When Required. The purchasing officer shall have the authority to require bid, performance and payment security or specific types and amounts of insurance coverage for specific procurements to the extent required by state law or upon a determination that it is in the best interest of the city to do so.

(b) Bid Security. Bid security, if required, shall be submitted with the bid and shall be a certified check, cashier's check or surety bond issued by an admitted surety insurer authorized to conduct business in the state of California. If a bidder fails to submit the required bid security with the bid, the bid shall be deemed nonresponsive. After bids are opened, bid security is irrevocable for the period specified in the invitation for bids. If the successful bidder fails to execute the contract within the time specified, the total amount of the bid security shall be forfeited to the city. The security of an unsuccessful bidder shall be returned to the bidder no later than sixty calendar days from the date of contract award.

(c) Performance Security. Performance security, if required, shall be in the form of a bond acceptable to the city and issued by an admitted surety insurer authorized to operate in the state of California.

(d) Form of Bonds. The only bonds acceptable to the city shall be those executed on forms approved by the city attorney and included with the bid or proposal documents.

(e) Insurance. The risk and insurance manager shall develop uniform insurance requirements for procurements and shall review and update the insurance requirements periodically. The successful bidder shall submit certificates of insurance and endorsement forms, as applicable, as evidence that it has the type and amount of insurance coverage required by the bid or proposal documents. Such evidence shall be submitted to the purchasing officer promptly upon request and shall be issued by an admitted insurer authorized to operate in the state of California and acceptable to the city.

(f) Indemnity for Infringement of Patents, Copyrights or Trademarks. Each contractor must hold harmless and fully indemnify the city and its officers, employees and agents from all damages or claims for damages, costs or expenses in law or equity that may arise for any infringement of the patent right, copyright or trademark of any person as a consequence of the use by the city or any of its officers, employees or agents, of goods supplied under a contract.

The city manager, the purchasing officer or a department head, or a designee of such individual, may make or authorize others to make emergency procurements, regardless of the cost, if there is an urgent necessity to do so for the preservation of life, health or property. Such emergency procurements shall be made with such competition as is practical under the circumstances and shall be limited to those goods and services necessary to satisfy the emergency need. In such circumstances, the purchasing officer or department head shall provide a written report of the procurement to the city manager, including a description of the emergency and the basis for selection of the particular contractor; and a copy of this report shall be included in the procurement records maintained by the purchasing officer. In the event that such emergency action is necessary and the procurement cost is greater than $50,000 in any one transaction, the city manager shall make a full and complete report to the city council at its next regularly scheduled meeting.

(a) Subject to the limitations contained in this section, the purchasing officer shall extend a bidding advantage to a local business in the form of a 1% price preference in the evaluation of bids or proposals for the procurement of goods.

(b) The following contracts are exempt from the provisions of this section:

(1) Contracts funded in whole or in part from grants, donations or gifts to the city if the provisions of this section conflict with any special conditions attached to the grants, donations or gifts, provided the special conditions have been approved and accepted pursuant to the donations policy of the city.

(2) Emergency procurements.

(3) Sole source contracts.

(c) After a due process hearing, should the city manager determine that a price preference was received under this section through an intentional misstatement, the recipient of any such price preference shall be subject to a civil penalty of treble the dollar price preference received or $1,000.00, whichever is greater.

(a) Right to Inspect Plant. The city may, at reasonable times, inspect the part of the plant, place of business or work site of a contractor or subcontractor at any tier which is pertinent to the performance of any contract awarded or to be awarded by the city.

(b) Right to Audit Records. The city shall be entitled to audit the books and records of a contractor or subcontractor at any tier to the extent that such books, documents, papers, and records are pertinent to the performance of such contract or subcontract.

(a) Cooperative Procurement. Notwithstanding any other provision of this chapter, the purchasing officer may authorize the city's participation with one or more other governmental, public or quasi-public agencies in a cooperative agreement for the procurement of goods and/or services, provided that at least one of the agencies has solicited bids using methods similar to those set forth in Section 2.08.060.

(b) Use of Another Entity's Contract. The purchasing officer may authorize the procurement of goods and/or services through the use of a contract initiated by another governmental, public or quasi-public entity, provided that the original parties to the contract agree, the contract was awarded within 12 months of the date of authorization, the contract is for identical or nearly identical goods and/or services, and the contract resulted from a competitive bid using methods similar to those required by this chapter.

(c) Mutual Aid. The purchasing officer may sell to, acquire from, or use goods belonging to another government, public or quasi-public agency independent of the requirements of this chapter and under the terms agreed upon between the parties, provided that such activity does not adversely affect city services and is approved in advance in writing by the city manager.

(d) Joint Use of Facilities. An end user may enter into agreements for the common use or lease of facilities with other government, public or quasi-public agencies independent of the requirements of this chapter and under the terms agreed upon between the parties, provided that such activity does not adversely affect city services and is approved in advance in writing by the city manager.

(e) Supply of Personnel. The requirements of this chapter shall not apply to any agreement or arrangement by which an end user provides personnel to or obtains personnel from another government, public or quasi-public agency. No such agreement or arrangement shall be effective unless it is approved in advance in writing by the city manager and the city manager determines it does not negatively affect city services.

(a) When a contractor fails to deliver goods or services in the quality, quantity, manner and time specified in the contract, such goods and/or services may be obtained from any source. If a greater price than that named in the contract is paid for such goods or services, the excess price shall be charged to and collected from the contractor or the surety on the contractor's bond, if any.

(b) Any contractor that fails to comply with the terms of its contract may be declared an irresponsible contractor after a due process hearing by a hearing officer appointed by the city manager. Upon such determination the contractor shall not be permitted to act as a contractor on any city contract for a period of up to five years, as determined by the hearing officer. Appeal of a determination that a contractor is irresponsible may be made to the city council. The contract may be cancelled, and in the event of cancellation, no recovery shall be had thereon.

(a) Authority. The purchasing officer is authorized to sell or dispose of surplus personal property having a salvage value in the open market, by public auction, by competitive sealed bids or by exchange or trade in for new goods. The sale or lease of surplus personal property to a governmental, public or quasi-public agency may be without advertisement for or receipt of bids.

(b) Property with No Salvage Value. Surplus personal property with no salvage value, as determined by the purchasing officer, shall be disposed of in a manner that salvages recyclable components, if practical.

(c) Unclaimed, Seized or Abandoned Property. The purchasing officer is authorized to sell or dispose of all goods in the possession or custody of the department of public safety which are unclaimed, seized and/or abandoned and may be legally disposed of by the city.

(d) Records. The purchasing officer shall provide regular reports to the city manager which indicate surplus personal property disposed of, the method of disposal, and the amounts recovered from its disposal and shall maintain records for public inspection relative to the disposal of surplus personal property for a period of time in compliance with state law and the city’s records retention schedule.

(e) Donations. Upon approval in advance in writing of the city manager, surplus personal property may be donated to governmental, public or quasi-public agencies, charitable or non-profit organizations.

(f) Proceeds of Sale. Proceeds from the sale of surplus personal property shall be deposited into the appropriate city fund.

(a) Statement of Policy. City employees shall discharge their duties impartially so as to assure fair competitive access to city procurement opportunities by responsible contractors. Moreover, they shall conduct themselves in such a manner as to foster public confidence in the integrity of city procurement activities.

(b) Conflict of Interest. No city employee shall participate directly or indirectly in a city procurement when the employee knows that:

(1) The employee or any member of the employee’s immediate family has a financial interest pertaining to the procurement; or

(2) The employee or any member of the employee's immediate family is negotiating or has an employment arrangement which is contingent upon or will be affected by the procurement.

(c) Withdrawal from Participation. Upon discovery of an actual or potential conflict of interest, an employee shall promptly withdraw from further participation in the procurement.

(d) Gratuities. No person shall offer, give or agree to give any city employee any gratuity or offer of employment in connection with a procurement by the city. No city employee shall solicit, demand, accept or agree to accept from any other person a gratuity or an offer of employment in connection with a procurement by the city.

This chapter shall be known and may be cited and referred to as the "Public Works Contracting Ordinance of the City of Sunnyvale."

The purposes of this chapter are to elaborate upon the methods and procedures pertaining to contracts for public works as set forth in section 1309 of the city charter, to provide for the fair and equitable treatment of all persons involved in the public works contracting process, to obtain the highest possible value in exchange for public funds and to safeguard the quality and integrity of the public works contracting system.

For the purposes of this chapter, the following definitions apply:

(a) Bid Documents. The documents, including their attachments and addenda, which set forth instructions to bidders and are disseminated for the purpose of soliciting bids.

(b) City Employee. An individual who performs services for the city in the capacity of an elected or appointed official, or as a compensated employee of the city or of a temporary services agency retained by the city. "City employee" does not include independent contractors.

(c) Change Order. Any order made or issued, for and on behalf of the city for any alteration in, deviation from, addition to or omission from any public works project for which a city contract shall have been awarded or entered into, including any increase or decrease in the quantity of any item or portion of the work or the omission of any item or portion of the work, and also including such extra work as may be determined by the officer or body authorized to issue such a change order to be required for the proper completion or construction of the whole work contemplated.

(d) City-Public Utility Contract. Any public works contract made and entered into for and on behalf of the city with any public utility which is either publicly owned or is regulated by the Public Utilities Commission of the state, for the doing by such public utility, for the city, of any work or thing which is included in the definition of "public works project" where the work involves property of the public utility and is otherwise of direct concern to both the city and the public utility.

(e) Construction. The process of building, erecting, improving or demolishing a public work.

(f) Contract. Agreements, regardless of how they may be labeled, between the city and one or more other parties for the performance of a public works project.

(g) Contractor. Any person who has entered into an agreement with the city to complete a public work.

(h) End User. The city of Sunnyvale or any component thereof requiring a public works project.

(i) Financial Interest.

(1) Ownership of any interest or involvement in any relationship from which, or as a result of which, a person has received compensation within the past year, or is entitled to, or is currently receiving compensation;

(2) Ownership, whether wholly or in part, of any property or business; or

(3) Status as an officer, director, trustee, partner, employee, or manager of a business.

(j) Gratuity. A gift, payment, loan, advance, deposit of money, or service, presented or promised in return for or in anticipation of favorable consideration in the contracting process. "Gratuity" does not include the compensation paid by or due from the city or from a temporary service agency under contract with the city to an employee in connection with the employee's services for the city.

(k) Immediate Family. Any spouse, child, stepchild, parent or stepparent of a city employee. The relationship of parent to child includes both natural and adoptive relationships.

(l) Improvement. A modification, alteration or addition to a public work which changes its type, size or extent and which is intended to make it better than its original status. Improvement does not include maintenance and repair.

(m) Intergovernmental contract. Any public works contract made and entered into for and on behalf of the city with any other governmental, public or quasi-public agency, for the doing by such other governmental, public or quasi-public agency, for the city, of any work or thing which is included in the definition of "public works project".

(n) Maintenance and Repair Services. Services intended to preserve and/or restore a public work to a clean, safe, efficient and/or continually usable condition. Maintenance and repair services may include, but are not limited to: carpentry, electrical, painting, plumbing, glazing and other craftwork to preserve a facility in the condition for which it was intended; repairs, cleaning and other operations on machinery and other equipment permanently attached to a facility as fixtures; the mowing, pruning, and trimming of lawns, grass, trees, shrubs, bushes and hedges; and regular removal or relocation of by-products or waste products accumulated at city facilities as the result of on-going environmental processes.

(o) Person. Any individual, partnership, limited partnership, association, corporation, labor union, committee, club, governmental, public or quasi-public entity.

(p) Professional Services. Services, which involve the exercise of professional discretion and independent judgment based on an advanced or specialized knowledge, expertise or training gained by formal studies or experience. Such services include, but are not limited to, those provided by appraisers, architects, attorneys, engineers, instructors, insurance advisors, physicians and other specialized consultants.

(q) Public Works. All works constructed for the use, protection or enjoyment of the public, including public buildings, streets, drains, sewers, utilities, parks and playgrounds.

(r) Public Works Contract. Any contract made and entered into for and on behalf of the city, with any other party or parties, for the doing of any work or thing by such other party or parties, which is included in the definition of "public works project." Public works contract does not include an intergovernmental contract, or a city-public utility contract.

(s) Public Works Project. The construction, improvement or demolition of public works. Public works project does not include maintenance or repair services as defined in this section.

(t) Purchasing Officer. The person designated by the city manager as the purchasing officer of the city, or an individual specifically authorized by the purchasing officer to act on his or her behalf.

(u) Responsible Bidder. A bidder determined by the awarding authority:

(1) To have the ability, capacity, experience and skill to perform the work in accordance with bid specifications;

(2) To have the ability to perform the work promptly, or within the time specified;

(3) To have equipment, facilities and resources of such capacity and location to enable the bidder to perform the work;

(4) To have a record of satisfactory or better performance under prior contracts with the city and other property owners where such bidder has previously been awarded such contracts;

(5) To have complied with laws, regulations, guidelines and orders governing prior or existing contracts performed by the bidder, if applicable.

(v) Responsive Bidder. A bidder determined by the awarding authority to have submitted a bid which conforms in all material respects to the requirements of the bid documents.

(w) Technical Specifications. A description of the physical characteristics or nature of the public works project, including drawings, plans, maps, diagrams, and/or other graphic representations of the project as applicable.

2.09.040. Project responsibilities.

(a) End User. The end user shall:

(1) Specify the public work needed and the availability of funding.

(2) Submit to the purchasing officer a description of the desired physical or functional characteristics of the public work. If the end user is other than the department of public works, the end user shall be assisted by the department of public works.

(3) Participate in the evaluation of bids, as required.

(b) Department of Public Works. The department of public works shall be responsible for providing the technical specifications for a public works project. The department of public works shall work with any other department which will be an end user of the project in devising the technical specifications and in subsequently evaluating bids and inspecting the work performed to determine conformity with the requirements set forth in the bid documents and with contractual obligations, authorize payment for conforming work and notify the purchasing officer of nonconforming work.

(c) Purchasing Officer. The purchasing officer shall be responsible for the acquisition of public works for the city in accordance with the provisions of this chapter. No acquisition of a public work shall be made by any city employee independently of the purchasing officer except in cases of emergency, unless otherwise authorized by the city manager. The purchasing officer shall:

(1) Prepare and recommend to the city manager operational procedures and forms for the acquisition of public works, in cooperation with the end user.

(2) Be responsible for dissemination of bid documents and supervision of the bidding process.

(3) Determine the amounts of bid security, labor and materials and performance security acceptable for public works projects, in conformance with state law.

(4) Process the contracts awarded and the payment of any funds due.

(d) City Manager. The city manager shall:

(1) Be the awarding authority for every public works contract for which the cost to the city is $50,000 or less.

(2) Be the awarding authority for any public works contract, the cost of which will be fully paid or reimbursed to the city by another governmental, public or quasi-public entity, regardless of amount.

(3) Review the results of all formal competitive bid solicitations for which the city council is the awarding authority and make recommendations to the city council as to the action to be taken

(e) City Council. The city council shall be the awarding authority for every public works contract for which the cost to the city is greater than $50,000 in any one transaction.

2.09.050. Delegated authority.

The city manager, after consultation with the director of finance and the director of public works, may delegate authority to solicit and process bids for public works projects to city employees other than the purchasing officer, if such delegation is deemed necessary for the effective development of a project. Delegation shall be made in advance in writing by the city manager and filed with the city clerk, the director of finance and the director of public works.

(a) Informal Competitive Bids. Public works projects anticipated to cost $50,000 or less may be acquired by informal solicitations in accordance with the provisions of this chapter. Solicitations may be verbal (unless otherwise required by law) or written, but bids must be in writing. Where possible, a minimum of three bidders should be solicited.

(b) Formal Competitive Bids. Public works projects anticipated to cost more than $50,000 shall be acquired by issuance of written invitations for bids. Bid documents include, at a minimum, the notice inviting bids; instructions to bidders; technical specifications; a form for the listing of subcontractors; a non-collusion affidavit; bid forms and schedules; all required bond forms and the proposed contract document.

(c) Federal or state funding. When a public works project involves the expenditure of federal or state funds, the acquisition shall be conducted in accordance with mandatory applicable federal or state laws or regulations.

(a) Contracts for public works projects for which the cost to the city in one transaction will exceed $50,000 shall be let by formal competitive bidding pursuant to section 1309 of the city charter and this chapter. Project requirements shall not be artificially divided so as to avoid the competitive bidding requirement.

(b) The following are exemptions to the competitive bidding requirement:

(1) Intergovernmental contracts.

(2) City-public utility contracts.

(3) Professional or specialized services.

(4) Emergency projects deemed by the council to be of urgent necessity for the preservation of life, health or property, authorized by the council consistent with the requirements of section 1309 of the city charter.

(5) Situations where solicitations of bids would for any reason be impractical, unavailing or impossible.

(6) Situations where it is determined that the work in question may be performed better or more economically by the city with its own employees, when authorized by the council consistent with the requirements of section 1309 of the city charter.

When deemed necessary for an adequate understanding of requirements, the purchasing officer is authorized to require bidders to attend pre-bid conferences or site inspections prior to the time and date set for receipt of bids and to consider nonresponsive bids from those bidders not in attendance.

(a) Formal competitive bids shall be advertised by notice inviting sealed bids published in the official newspaper of the city at least once at least ten days before the time and date set for receiving bids. Bids may be advertised more than once.

(b) The notice shall specify the time on or before which bids will be received, where and with whom bids shall be filed; the date, time and place where and when bids will be publicly opened and the bid of each bidder declared.

(c) At the bidder's request and where city deems feasible, bid documents may be transmitted to the bidder over the Internet.

(a) Before Date and Time for Receipt of Bids. Bids which contain mistakes discovered by a bidder before the date and time for receipt of bids may be modified or withdrawn by written notice to the purchasing officer received prior to the deadline.

(b) After Date and Time for Receipt of Bids. A bidder may not change its bid after the date and time set for receipt of bids except that the bidder may seek the city's consent to the substitution of a subcontractor where the bidder can demonstrate, in accordance with the provisions of state law, that the name of the substituted subcontractor was listed as the result of an inadvertent clerical error.

(c) Withdrawal of Bid. A bidder alleging a mistake in a bid may be permitted to withdraw its bid in conformance with state law.

(a) Receipt of Bids.

(1) Informal Competitive Bids. Bids which are submitted in response to informal competitive bid solicitations shall be in writing and may be transmitted to the purchasing officer by facsimile machine, by mail, electronically over the Internet, or by any other means of delivery. Bids received prior to the date and time designated in the solicitation documents shall be retained in confidence by the purchasing officer until the date and time set for the receipt of bids.

(2) Formal Competitive Bids. Sealed bids submitted in response to formal competitive bid solicitations shall be received by the purchasing officer at a time, date and place designated in the bid documents.

(b) Public Opening. Formal competitive bids, timely received, will be publicly opened by the purchasing officer in the presence of one or more witnesses at the location designated in the bid notice. If members of the public are present, the names of those submitting bids and the bid amount shall be read aloud at or shortly following the deadline for receipt of formal competitive bids.

(c) Late Receipt. Formal competitive bids received after the deadline for receipt of bids shall not be accepted and shall be returned to the bidder unopened unless necessary for identification purposes. The purchasing officer shall submit written notification to the bidder stating what the deadline was, when the bid was actually received, and that it is being returned because it was received too late.

(d) No Receipt. If no bids are received in response to a formal competitive bid for a public works project, the purchasing officer may reissue the solicitation or the awarding authority may determine and declare the work in question may be performed better or more economically by the city with its own employees, consistent with the provisions of section 1309 of the city charter, or the city may decide to not go forward with the project.

2.09.120. Evaluation of bids.

(a) One Bid Received. In the event that a single bid is received, the awarding authority may reject the bid.

(b) Tie Bids. In the event that an identical price is received from two or more responsive and responsible bidders, and in the judgment of the awarding authority the public interest will not be served by re-advertising for bids, the awarding authority may authorize the purchasing officer to determine the successful bidder by the casting of lots with the tie bidders in public at a date and time set by the purchasing officer.

(c) Irregularities. In considering bids for any public works contracts, the awarding authority may waive, if it wishes to do so, minor defects or irregularities in the bids, provided that the discrepancy does not affect the bid amount or give the bidder an advantage over others.

(a) Submission of Bids. Only one bid may be submitted by a "prime contractor" for the same public works project. A contractor submitting a bid as a prime contractor may not also submit sub-bids to competing prime contractors. A contractor who is not submitting a bid as a prime contractor may submit any number of sub-bids to competing prime contractors.

(b) Subcontractors. A prime contractor must include with its bid the name and business address of, and the portion of the work which will be done by each subcontractor who will perform work on the public works project in accordance with state law. After the date and time set for receipt of bids, no substitution of subcontractors in place of those listed in the bid or addition of subcontractors will be permitted except as authorized by state law.

(a) Cancellation of Solicitations. The purchasing officer may cancel competitive bid solicitations before the date and time set for receipt of bids upon a written determination that such action is in the city’s best interest for reasons including, but not limited to any of the following:

(1) The city no longer requires the public works project, as determined by the director of public works, the city manager or the city council;

(2) The city no longer can reasonably expect to fund the public works project, as determined by the director of finance, the city manager or the city council;

(3) Proposed amendments to the solicitation would be of such magnitude that a new solicitation is desirable;

(b) Rejection of Bids. The city manager may reject, in whole or in part, bids received in response to informal competitive bid solicitations or in response to formal bids for which the city manager is the awarding authority. The city council may reject, in whole or in part, bids received in response to formal competitive bid solicitations. If all bids are rejected, the city has the discretion to readvertise.

(c) Records. The fact that a solicitation was cancelled or bid rejected shall be made part of the project records.

2.09.150. Contracts.

(a) Best Interest of City. Subject to the requirements of state and federal law, and the limitations of this chapter, the purchasing officer shall include in the contract document such terms and conditions as will promote the best interests of the city.

(b) Modification of Contracts. The awarding authority may establish a contingency amount for each public works contract in conjunction with the award of contract. Alterations, deviations, additions or deletions from the original scope of work which are determined by the city to be necessary during the progress of work shall be documented by written change orders. The cost of each change order shall be determined by a fair and reasonable valuation, agreed to in writing by the director of public works, or the director's designee, and an authorized representative of the contractor, and shall be added to or deducted from the contract price. Changes, the total cost of which do not exceed any contingency amount approved by the awarding authority at the time of contract award, shall be authorized in advance of the contractor's performance of the work by the director of public works or the director's designee. Change orders in excess of the approved contingency amount shall be authorized by the awarding authority in advance of the contractor's performance of the work. In the event the city and the contractor are unable to agree upon the cost of a change order, the contractor will be paid the actual costs for labor, materials and equipment used in performing the work plus a mark-up as set forth in the contract.

2.09.160. Contract award.

Where it is necessary for an awarding authority to take formal action to award a contract, the contract shall not be considered as awarded absent the formal action being taken. Any contract awarded shall be to the lowest responsive and responsible bidder.

2.09.170. Project records; Public inspection.

(a) Records Maintenance. The purchasing officer shall maintain records for each project which include, at a minimum, the project request from the end user; the bid documents for the project, if any; any and all bids received; the basis on which contract award is made; and a copy of any and all contracts awarded. Such records shall be maintained for a period of time in compliance with state law and the city’s records retention schedule and shall be available for public inspection during normal city business hours.

(b) Public Inspection. Bids shall be available for public inspection following the date and time set for receipt of bids.

2.09.180. Bonds and other security; insurance requirements.

(a) When Required. The purchasing officer shall have the authority to require bid security, labor and materials and performance bonds as well as specific types and amounts of insurance coverage for public works projects to the extent required by state or federal law or this chapter or upon a determination that it is in the best interest of the city to do so.

(b) Bid Security. Bid security shall be submitted with the bid and shall be a certified check, cashier's check or surety bond issued by an admitted surety insurer authorized to conduct business in the state of California. If a bidder fails to submit the required bid security with the bid, the bid shall be deemed nonresponsive. After bids are opened, bid security is irrevocable for the period specified in the invitation for bids. If the successful bidder fails to execute the contract within the time specified, the total amount of the bid security shall be forfeited to the city. The security of an unsuccessful bidder shall be returned to the bidder no later than sixty calendar days from the date of contract award. Bids for public works projects greater than $25,000 shall require the submission of bid security in an amount equal to at least 10% of the bid. On projects less than or equal to $25,000, the purchasing officer is authorized to determine if bid security is needed on a project by project basis.

(c) Labor and Materials and Performance Security. Labor and materials and performance security shall be in the form of a bond acceptable to the city and issued by an admitted surety insurer authorized to operate in the state of California. Bids for public works projects greater than $25,000 shall require the submission of labor and materials and performance bonds, each in an amount equal to 100% of the contract price, at the same time the contract is executed. Where the contract is with a governmental, public or quasi-public agency or a public utility the requirement for performance and payment security may be waived in writing by the director of public works if the contracting governmental agency or public utility agrees that, to the extent all work is not to be done by its own employees, it will require any and all contractors it awards contracts for the performance of any of the work to provide, before commencement of the work, labor and materials and performance bonds, satisfactory to the city and complying with the provisions of the California Civil Code. Labor and material and performance bonds for public works projects shall be extended in the full amount of the contract for a one year warranty period beyond the date of acceptance of the work by the city. On projects less than or equal to $25,000, the purchasing officer is authorized to determine if labor and materials and performance security is needed on a project by project basis.

(d) Form of Bonds. The only bonds acceptable to the city shall be those executed on forms approved by the city attorney and included with the bid documents.

(e) Insurance. The risk and insurance manager shall determine insurance requirements. The successful bidder shall submit certificates of insurance and endorsement forms, as applicable, as evidence that it has the type and amount of insurance coverage required by the bid documents. Such evidence shall be submitted to the purchasing officer promptly upon request and shall be issued by an admitted insurer authorized to operate in the state of California and acceptable to the city. The risk and insurance manager may waive the insurance requirement when the contract is an intergovernmental contract or a city-public utility contract, and the governmental, public or quasi-public agency or the public utility to whom the contract is awarded agrees that it will have all the work done under contract(s) and will require such contractor(s) to obtain and provide evidence of the required insurance before commencement of the work naming the city, its officers, agents and employees as additional insureds to such policy.

(a) The contract between the city and the contractor may provide for progress payments, which may be made on the basis of a certified estimate. If a subcontractor or material supplier has filed and served upon the city a stop notice valid under state law, the city shall not make progress payments to the extent the stop notice requires the city to withhold payment from the contractor.

(b) In addition to monies or securities held pursuant to this section, the city shall have the right in its sole discretion to withhold in cash from the last progress payment an amount equal to one and one-half times the value of any outstanding items of corrective work or items listed as uncompleted or uncorrected or omitted work until such items are completed to the satisfaction of the director of public works.

(a) In addition to any faithful performance bond that may be required the city shall not enter into, execute or issue any city-public utility contract for any work or improvement, unless at the time of execution of such contract and before commencement of performance of any work, the public utility first deposits with the city a clean-up deposit, calculated by the purchasing officer as a percentage of the total cost of the project; provided, however, that no deposit shall be required where the contract terms provide that the city is to pay for the work. In the event that the public utility refuses or fails for any reason to faithfully perform all the covenants and conditions of the contract, the director may either recommend pursuit of the city's remedies under the faithful performance bond, or else correct, or cause the correction of such defective or incomplete performance at the city's expense and then reimburse the city its costs incurred from such deposit. Retention of money under such deposit is without prejudice to the city's right to any other remedies.

(b) Upon the acceptance of the public improvements either constructed, reconstructed, altered, removed, installed or replaced by the public utility, as corrected or completed, if necessary by the director on the city's behalf, the unexpended portion of such deposit shall be returned to the public utility.

(a) Statement of Policy. City employees shall discharge their duties impartially so as to assure fair competitive access to public works project bids by responsible contractors. Moreover, they shall conduct themselves in such a manner as to foster public confidence in the integrity of public works project activities.

(b) Conflict of Interest. No city employee shall participate directly or indirectly in a public works project when the employee knows that:

(1) The employee or any member of the employee’s immediate family has a financial interest pertaining to the project; or

(2) The employee or any member of the employee's immediate family is negotiating or has an employment arrangement which is contingent upon or will be affected by the project.

(c) Withdrawal from Participation. Upon discovery of an actual or potential conflict of interest, an employee shall promptly withdraw from further participation in the project.

(d) Gratuities. No person shall offer, give or agree to give any city employee any gratuity or offer of employment in connection with a public works project by the city. No city employee shall solicit, demand, accept or agree to accept from any other person a gratuity or an offer of employment in connection with a public works project by the city.