Purchasing Policy

The City of Kelowna's contracting policy is set out below.

Calling Bids

a. Authority

Apart from the overall authority granted to the City Manager, only the following officials are authorized to call bids:

1. The City's Manager, Purchasing & Stores may call bids for the purchase of construction, consulting services, equipment, material, supplies and services for use in City operations;
2. The Manager Purchasing & Stores from time to time may delegate others such as The Director of Works and Utilities to call bids for City engineering works and services;
3. The Manager, Community Services and Land Development may purchase land.

b. Bid Limits

Approximate dollar limits establish the methods employed to purchase equipment, material, supplies and services:

1. Quotations or Requests for Proposal (up to $25,000): prices are obtained by Purchasing Services from internal price records or from known suppliers by telephone or in writing, depending on the value of the purchase. Written quotations or proposals are received and opened in the Purchasing Office, with total bid prices available for review on request.
2. Tenders or Requests for Proposal (above $25,000): are advertised by Purchasing Services in the Daily Courier newspaper, on the City web page www.city.kelowna.bc.ca and on BC Bid (depending on the type of commodity/service). A copy of the advertisement is posted on the public notice board in the City Hall and copies of the tender or RFP are mailed to known suppliers. Tenders or proposals are received and opened/registered in public in the City Clerk's office.
3. The above bid structure and limits also apply to situations where Purchasing Services is not involved and City departments have conduct of the purchasing process (e.g. Works and Utilities for City engineering works and services.

Awarding & Executing Contracts

a. Awarding Contracts

Listed below are the officials to whom City Council has delegated the power to accept tenders and proposals and award contracts.

1. For low bid or best value contracts up to $100,000: the City's Purchasing Manager in conjunction with the initiating Department Head.
2. For low bid or best value contracts above $100,000 and up to $250,000: the City Manager.
3. Purchases up to a total value of $25,000 that are other than the lowest evaluated bid; the City Manager.
4. Above $250,000: City Council.
5. All contracts under seal; City Council.
6. All purchases over $25,000 that are other than the lowest evaluated bid; City Council.
7. All supply contracts for a period in excess of 12 months where the commitment beyond 12 months' supply exceeds $50,000.

b. Surety Bonds (Deposits)

Surety bonds are obtained to assure performance by a contractor. The City requires surety bonds depending on the contract value and the risk factors.

1. Bid Bonds (10% of the bid amount)

   A bid bond is a guarantee that if a bidder's tender or proposal is accepted, the bidder will enter into the contract within the time specified. If the bidder fails this obligation, the bid bond will provide a sum of money up to the face amount of the bond to bridge the difference between the amount of the original bid and the amount for which the City legally contracts with another party to do the work or supply the goods or services under the tender or RFP.

   A bid bond also provides assurance that the bidder is bondable by the surety (bonding company) and that the bidder will provide the City with the specified security, which is usually a performance bond.

   The acceptance of cash, a certified cheque or a letter of credit is an acceptable alternative to a bid bond if a performance bond from a surety (bonding company) is not required on the contract.

2. Performance Bonds

   A performance bond, subject to its limits, provides that the contractor will complete the contract in accordance with the plans and specifications, on time and at the agreed price. Where a maintenance clause is included in the contract, a performance bond automatically covers the maintenance clause. A performance bond is appropriate where installation, custom work or modification is included in the contract. Performance bonds are required with contracts with a value above $100,000 for the following types of purchases, except that the City's Purchasing Manager is authorized to demand performance bonds for any type of purchase regardless of value as necessary to protect the interests of the City:

   • equipment specially manufactured;
   • services;
   • construction contracts; and
   • specialized installations including supply of equipment.

   The acceptance of cash, a certified cheque or a letter of credit is an acceptable alternative to a performance bond in certain circumstances as determined by the agency having conduct of the purchasing process.

   Performance bonds must be for 100% of the contract amount except for construction contracts where the performance bond may be for 50% of the contract amount provided there is also a labour and materials payment bond for 50% of the contract amount.

   The City Manager has the authority to waive the requirement for a performance bond in unusual circumstances, or to adjust the bond limits as appropriate for the contract.