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PURCHASING POLICY
DATE: April 13, 2021
PURPOSE/OVERVIEW:
This policy is established to ensure purchasing activities that are fair and equitable, maximize
purchasing value for public funds, and to maintain a procurement system of quality and integrity
throughout the procurement process. These policies and procedures are intended to ensure that
all city funds are expended in accordance with sound business practices, recorded in compliance
with acceptable accounting procedures, and meet the requirements of federal and state agencies
that may assist in the financing activities of the City of Muskegon.
GOALS:
The City of Muskegon maintains this policy with the goals of:
• Establishing clear specifications that meet city objectives.
• Providing for the greatest competition among potential suppliers while limiting cost to
meet the quality of the product or service specified.
• Awarding where possible to local bidders who meet specifications within the context of
lowest qualified bidder.
• Ensuring adequate monitoring and reporting of purchasing.
OPERATIONAL GUIDELINES:
• This policy applies to the procurement of supplies, goods, equipment, and services by the
City of Muskegon.
• The purchasing policy applies to all city departments and to other agencies, authorities,
commissions, boards, and joint-ventures.
• All purchases over $25,000 require approval by the City Commission. Purchases over
$25,000 must be established either through the annual budget or City Commission
approval of additional appropriations. It is the sole responsibility of the
Division/Department Head to maintain control of their individual budgets.
• Some purchases are unique in nature and do not require the process of competitive
bidding. These items are excluded from the bidding and purchase order requirements.
Examples include but are not limited to debt service payments and ongoing expenses for
utilities or services.
• The city will not be responsible or liable for any expenditure or agreement for expenditure
made by a city employee or city official who fails to follow this purchasing policy and its
procedures. Contracts negotiated outside of this policy will be considered invalid and non-
binding. Any breaches of this policy shall be reported directly to the Finance Director and
City Manager.
• Contracts or purchases shall not be artificially divided to circumvent the purchasing
procedures in the policy. Aggregate, recurring purchases such as gasoline, paper products,
cleaning supplies, ammunition, etc. must be determined on an annual basis.
LOCAL PREFERENCE
The City Commission may give preference to local vendors as follows.
• Vendors located in the City of Muskegon may be awarded purchases or contracts when the
lowest qualified local bid/price is within 2% or less of the lowest qualified non-local bid.
• An additional 0.5% difference in bid amount (for a total of 2.5%) will be considered for those
qualified vendors located in the City of Muskegon which are not-for-profit and provide social
services to City of Muskegon residents.
• Vendors located in Muskegon County may be awarded purchases or contracts when the
lowest qualified local bid/price is within 1% or less of the lowest non-local bid.
• For purchases under $1,000, local vendors shall be solicited unless valid reasons determine
this is not in the best interest of the City.
DISADVANTAGED CONTRACTOR GOALS
The City Commission establishes goals for disadvantaged contractor participation in each
trade as follows.
• 14% minority owned businesses
• 7% female owned businesses
A Disadvantaged Contractor Affidavit listing all disadvantaged contractors that were
contacted to participate on the project as sub-contractors must be submitted by each bidder.
The affidavit must clearly state why each potential subcontractor was not considered for
inclusion in the project. A disadvantaged contractor refers to businesses that are owned and
controlled by minorities, women, and other socially and economically disadvantaged
persons.
PURCHASING AUTHORITY
The City Manager's Office shall be responsible for the administration of the purchasing system of
the city. The procurement procedure to be used is determined by the dollar amount of the
procurement. Contracts or purchases shall not be artificially divided to circumvent the purchasing
procedures in the policy. Aggregate, recurring purchases such as gasoline, paper products, cleaning
supplies, ammunition, etc. must be determined on an annual basis. The requirements for each level
of spending are outlined below.
Amount Requirements
Below $2,000 Purchases are made by the
Department/Division Head and do not
have to be competitively bid. Vendor
selection and pricing should be reviewed
annually for adequate and reasonable
competition.
$2,000 to $4,999.99 A minimum of three written quotes are
required. Award shall be made to the
qualified vendor offering the best value in
the opinion of the Department/Division
Head.
$5,000 to $9,999.99 A minimum of three written quotes are
required. Award shall be made to the
qualified vendor offering the best value in
the opinion of the Division Head.
$10,000 to $24,999.99 A minimum of three written quotes are
required. Award shall be made to the
qualified vendor offering the best value in
the opinion of the Division Head and City
Manager.
$25,000 and above Formal competitive bids shall be solicited
through Competitive Sealed Bid or
Request for Proposals and are subject to
negotiation after bid award.
With City Manager or Division Head approval, any products and services that are available only through a single
source can be procured without bidding. Where possible, a state or regional bid contract (such as MiDeal) will
be used for single source procurement. In the event no bids were received, the City Manager or Division Head
can approve the purchase of products or services through a single source.
Division Heads may set purchasing thresholds for their staff as long as the threshold does not exceed that for
the Division Head.
PROCUREMENT PROCEDURES
Competitive Sealed Bidding
1. An invitation for bids shall be issued and shall include specifications and all contractual
terms and conditions applicable to the procurement.
2. Public notice of the invitation for bids shall be made available two weeks in advance of the
bid submission date set forth. Notices may include publication in a newspaper of general
circulation and/or online media. Professional/technical services need not be publicly
advertised, but competition must be ensured.
3. Bids shall be opened publicly by the City Clerk’s office in the presence of one or more
witnesses following the deadline set for the submission of bids at the time and place
designated in the invitation for bids. The amount of each bid and such other relevant
information as the Division Head deems appropriate, together with the name of each bidder,
shall be recorded; the record and each bid shall be open to public inspection.
4. Bids will be evaluated based on the requirements determined in the invitation for bids.
These requirements may include inspection, testing, quality, workmanship, experience,
delivery, warranty, and suitability for a particular purpose. Bids that do not comply with all
criteria set forth in the invitation to bid may be subject to disqualification by City
Commission.
5. Withdrawal of inadvertently erroneous bids before or after award, or cancellation of awards
or contracts based on such bid mistakes, shall be permitted. After bid opening, no changes
in bid prices or other provisions of bids prejudicial to the interest of the city or fair
competition shall be permitted. Except as otherwise provided, all decisions to permit the
withdrawal of bids, or to cancel awards or contracts based on bid mistakes, shall be
supported by a written determination made by the Division Head, endorsed by the City
Manager and approved by the City Commission.
6. Award shall be made to the qualified bidder whose bid is determined to be the most
advantageous to the city, taking into consideration price and the evaluation criteria set forth
in the invitation for bids, as determined by City Commission.
Request for Proposals (RFP)
1. When a Division Head determines that the use of competitive sealed bidding is not practical,
not advantageous to the city, and/or when a selection should be based on the most qualified
vendor, a contract may be entered by use of competitive sealed request for proposals.
2. Public notice shall be the same as for the competitive sealed bidding process.
3. The identity of each vendor and the content of any competing vendors shall not be disclosed
until the time of the public opening of proposals.
4. Proposals shall be opened publicly by the City Clerk’s office in the presence of one or more
witnesses following the deadline set for the submission of proposals at the time and place
designated in the request for proposals. A register of the proposals shall be prepared
containing the name of each vendor, the number of modifications received, if any, and a
description sufficient to identify the item offered.
5. As provided in the RFP, discussions may be conducted with qualified vendors to assure
understanding of and conformance to the solicitation requirements. Qualified vendors shall
be accorded fair and equal treatment with respect to any opportunity for discussion to clarify
information in the proposal which impacts city staff’s ability to make fair comparisons
between proposals.
6. Award shall be made to the qualified vendor whose proposal is determined to be the most
advantageous to the city, taking into consideration the evaluation criteria set forth in the
request for proposals, by the City Commission.
Cancelation of Bids or Requests for Proposals
A bid, request for proposal, or other solicitation may be canceled, and any or all bids or proposals
may be rejected in whole or in part when it is in the best interest of the city, as determined by the
Division Head and supported by the City Manager. Each solicitation issued by the city shall include
this notification.
Cooperative Purchasing
The city may join in cooperative purchasing arrangements with the State of Michigan or any other
government units or non-profit agencies. Any cooperative agreements set forth by the City of
Muskegon must follow the guidelines of this policy.
Emergency Procurements
When there is an immediate threat to the public health, safety, or welfare of the city or its citizens,
the City Manager may authorize the award of a contract utilizing competition as may be practical
and reasonable under the circumstances, for the emergency purchase of supplies, materials,
equipment, services or construction. Such purchase must be reported to the City Commissioners as
soon as possible.
Recycled Products
The city shall make every effort to purchase recycled products whenever possible.
Insurance Requirements
Vendors and contractors will be required to carry adequate insurance coverage.
CONSTRUCTION PROJECTS
Construction projects are subject to the provisions of this policy and the requirements that follow.
• Prevailing Wages – The City will continue to comply with any local, state, or federal policies
as required by the funding source for a particular project. For example, Public Works
projects which include federal transportation, drinking water, or sanitary sewer funding
require prevailing wages be paid to contractors. The City Commission may also give
preference to vendors paying Davis Bacon wages on other projects by awarding contracts
when the lowest qualified prevailing wage bid/price is within 1% or less of the lowest
qualified non-prevailing wage bid. When applicable, the 1% preference can be added to the
local preference up to a 3% or $100,000 differential, whichever is less.
• Change Orders – The Department Head in charge of the construction project shall have the
authority to approve individual change orders up to 10% of the cost of the construction but
not more than $30,000, unless the approved budget includes a contingency amount that
covers the amount of the change order. The City Manager is authorized to approve change
orders and contract expenditures between 10% and 20% but not more than $30,000, unless
the approved budget includes a contingency amount that covers the amount of the change
order. The City Commission must approve (retroactively if urgent) any change order or
combination exceeding the above parameters. All final payments of construction projects
shall require signatures from the Department Head, the Finance Director, and the Division
Head.
• Bid Bond – All construction projects shall require a bid bond from each bidder in the amount
of five percent (5%) of their bid. The bond will secure the bid. The bond will be released
upon award of the contract by the City Commission for unsuccessful bidders and upon
execution of the contractor for the successful bidder. (Lesser amounts than 5% may be
permitted by exception for good cause upon approval by the City Commission.)
• Performance Bond – All construction projects shall require a performance bond from the
successful bidder for the full amount of the contract or as specified by bid document. This
bond will be written in such a manner to ensure satisfactory completion of the project. The
bond shall be in effect for one full year after completion of the project. The bond will be
released only after the Department Head in charge of the project and the Division Head are
satisfied that the project was properly completed and one year has elapsed.
STANDARDS OF CONDUCT/REQUIREMENTS:
Recognizing that city purchases involve the use of public funds, the following standards shall apply
to all purchases made.
• All vendors, current and prospective, shall be treated equitably. Purchasing decisions
shall be based upon price, quality, delivery, written standards, previous service, and other
relevant factors promoting the best interest of the city.
• Employees shall be prohibited from furnishing to any prospective bidder information that
would give any vendor an unfair advantage over other prospective vendors.
• Purchasing records shall be retained by the Finance Division for public review.
• Employees shall not utilize the city's purchasing system to purchase items for personal use.
• Employees shall be prohibited from accepting rebates, gifts, gratuities, or favors from
vendors. Any extra option or alternative providing benefit to the city shall be explained in
the bid.
• Employees shall have no financial or beneficial interest in any contract or purchase order for
goods and services used by the city. The city’s charter shall govern conflicts of interest.
• Vendors must be businesses in good standings with the city.
AUTHORITY:
The City Commission has authority to set regulations for purchasing and direct the City Manager to
implement them per Chapter IV, Section 13 of the City Charter.
VIOLATIONS:
In the event that staff do not follow the purchasing policy, decisions will be made per the following
guidelines.
For any single expenditure under $25,000, the City Manager and Finance Director review the
purchase.
For any single expenditure of or over $25,000, the City Manager and Finance Director review the
purchase with the City Commission.
For any single expenditure of or over $25,000, where the City Manager or Finance Director have not
followed the policy, the Division Head who most recently served as interim City Manager reviews
the purchase with the City Commission.
AMENDMENTS:
Any amendments to this Purchasing Policy will be submitted to the City Commission by the City
Manager and shall require City Commission approval by resolution.
CONTACTS:
For assistance with your needs, please contact the Finance Department at 231-724-6932.
Document edit notes
Action Person Date Change
Revision L. Mikesell 5-11-2026 Added purchasing authority for Division Heads, converted to new logo template
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