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Financial Management for Elected Officials January 2013 <br /> <br />Institute for Local Government www.ca-ilg.org 19 <br /> <br /> <br /> <br />Purchasing and Contracting Practices <br /> Procurement policies and practices enable an agency to promote maximum value and economy for the agency’s constituents through fair and competitive processes. The goal underlying such policies is to select vendors and service providers using processes in ways that minimize opportunities for favoritism and that provide for competitive pricing. For service providers, the task also involves assessing whether the provider’s skills best meet the agency’s needs. Purchasing presents a number of ethical and legal hazards for local officials, despite what can be a relatively small impact on overall agency spending. This is because missteps can undermine the public’s overall confidence in the agency’s financial practices. For more information, see www.ca-ilg.org/post/fair-procurement. <br />For public works projects, state law generally defines when local agencies must use competitive <br />bidding.32 <br />Questions to Ask <br /> <br />• What steps does the agency use to have a fair, open and competitive purchasing process? <br /> <br />• Does the agency’s purchasing process explain the respective roles of staff and elected <br />officials in that process? <br /> <br />• Have employees involved in the purchasing process received training or informational <br />materials on the importance of both the appearance and substance of fairness in the <br />procurement process? <br /> <br />• Are the purchasing rules straightforward enough so that everyone who has a part in <br />implementing them understands the underlying goals and key rules? One element of clarity <br />can be having separate policies depending on the nature of the purchase (for example, one for <br />goods, one for services and another for public works projects). <br /> <br />• If the agency has a decentralized purchasing system (in other words, if purchase are made <br />separately by different departments), does the agency have clear organization-wide standards <br />and guidelines? <br /> <br />• Does the agency take advantage of cooperative purchasing opportunities with other public <br />agencies? <br /> <br />• Does the agency have policies in place to comply with applicable prevailing wage <br />requirements? These are especially common for vehicles and other big-ticket items. <br /> <br />• Would increased reliance on “just-in-time” deliveries that eliminate large inventories and <br />warehouse systems be useful for the agency? <br />Page 69 of 109