A. A contract is a written agreement for the procurement or disposal of supplies, services, insurance, equipment, or construction. To be effective, a contract must include offer and acceptance by competent parties and the furnishing of some good or service for an agreed monetary consideration.
B. All services provided to the city by outside agencies, firms, or individuals shall be on a contractual basis. If the estimated annual cost of services is over $30,000, the services shall be bid publicly and the contract awarded and signed by the City Council. For services with an annual cost not to exceed $30,000, a minimum of three written quotations shall be required, and a contract signed with the successful company. The City Manager shall sign contracts valued from $10,000 to $30,000 for cooperative purchasing agreement contracts. The Administrative Services Director shall sign contracts with an annual cost of between $3,000 and $10,000. The purchasing agent may sign contracts from $1,000 to $3,000. Department directors may sign contracts for under $3,000.
C. Generally the city utilizes only "fixed price" contracts, but might in a special instance, because of market conditions, utilize a contract with price increase provisions. A fixed price contract is used when the extent and type of work necessary can be reasonably specified and the cost reasonably estimated. Any time there is a price increase under these contracts, there must be supporting documentation from the vendor showing an increased price for raw materials from his or her supplier. Escalator clauses relating to the Consumer Price Index may be included in the contract language.
D. REQUIREMENTS CONTRACTS are fixed price agreements set up to provide for recurring purchases of indefinite quantities from the same supplier for a specified period of time. The use of cost-plus-a-percentage-of-cost contract is prohibited. A cost-plus-a-percentage-of-cost provides reimbursement to the supplier for his or her actual cost plus an agreed-upon percentage of the costs of the supplier's overhead and profit.
(Res. 2008-011, passed 2-19-2008)