PURCHASING TRAINING. October 13, 2017

Transcription

1 PURCHASING TRAINING October 13, 2017

2 Objectives Review procurement laws and policies that establish authority, responsibility, and administrative procedures for purchasing for Chesterfield County Government and Chesterfield County Schools Define five methods of procurement and related processes Identify the planning process for purchasing and its purpose and benefits 2

3 Procurement Laws and Policies Code of the County of Chesterfield Article V, 2-41 Establishes authority, responsibility, and exceptions. (Your locality probably has Procurement language in your own code) Virginia Public Procurement Act (VPPA) The Virginia Public Procurement Act (VPPA) provides rules and guidance for procurement by government entities within the Commonwealth of Virginia. Defines official responsibility Governs methods for spending public funds 3

4 Procurement Laws and Policies (Continued) Virginia Freedom of Information Act (FOIA) In accordance with this Act, all proceedings, records, contracts and other public records relating to procurement transactions are open to inspection by any citizen, or any interested person, firm or corporation. Chesterfield County Purchasing Manual Details the county s policies and procedures for procurement. For access to the County s purchasing manual, you can go to our website at 4

5 Official Documents PURCHASE REQUISITION (PR) submitted electronically in OneSolution (Chesterfield s ERP system) PURCHASE ORDER (PO) 5

6 Purchase Requisition Addresses: Enter correct shipping/billing addresses. Item Description: Begin with a noun and furnish a complete description of the product or service requested. Product Code: Make sure correct product code is entered so your request will route to the appropriate Contract Officer; if unsure of product code, contact Purchasing. Object Code: Make sure the correct object code is entered to route the PR properly if other approvals are required. (i.e., IST for technology, Fleet for vehicles, etc. are examples where our locality requires additional approvals) 6

7 Purchase Requisition Documents: Attach information necessary to support purchase request. Order Splitting: Purchasing monitors requisition activity to avoid splitting orders to circumvent purchasing requirements. Blanket Orders: Entered for routine or repetitive purchases under a contract or less than $10,000 annually. Should include the estimated annual dollar expenditure. This is specific to our locality based on our dollar thresholds. 7

8 Purchase Order The acceptance of a Purchase Order is a binding contract. Authorizes the Contractor to ship goods or provide services. Purchases exceeding $5,000: Although a purchase order number is generated at time of PR creation, this is not authorization to place the order. Purchasing must review, administer appropriate procurement process, and award contract. Our locality currently has a delegated authority threshold of $5,000. 8

9 Procurement Methods, Procedures and Cycle Small Purchases Competitive Sealed Bidding Competitive Negotiation Sole Source Emergency 9

10 Small Purchases Purchases of goods and services where the onetime or cumulative annual amount is less than $50,000 (throughout the County and Schools). We combine the two entities since our department is responsible for procurement for both County and Schools. Currently the VPPA allows for small purchase procedures to be utilized for procurements up to $100,000 for nonprofessional and $60,000 for professional. Your locality/entity may have different thresholds, however, at Chesterfield, our threshold is still at $50,000 for small purchases. 10

11 Small Purchases The following information should be considered when making Small Purchases: - Insurance: Proof of insurance is required from any contractor providing goods and/or services to the County and Schools. Contact Risk Management for appropriate insurance requirements. - Contractor s License: Any services provided by a contractor for construction, removal, repair or improvement to any building or structure permanently annexed to real property totaling $1,000 or more requires a license issued by the Virginia Department of Professional and Occupational Regulation (DPOR). License can be verified through their website DPOR : License Lookup & Disciplinary Actions 11

12 Small Purchases Diversity Initiative: Using departments obtaining quotes for purchases under $10,000 are strongly encouraged to seek price quotations from Minority-Owned Businesses, Women-Owned Businesses and businesses located in Chesterfield County. This is a Chesterfield process, however, again, your locality/entity may have specific policies/processes in place for inclusion of MOB, WOB, Veteran Owned or locality specific owned businesses in your procurements. Order Splitting: Do not split orders or make repeated purchases to stay within the designated purchase limit. 12

13 Small Purchases Tips for Securing Price Quotes - Provide vendors with the following information and inform them that you are seeking competitive prices: Complete description/specifications/insurance requirements Accurate quantities Date required for delivery (if applicable) Delivery information (special or inside delivery/installation) FOB Destination (vendor responsible for damages until received and accepted by the County) 13

14 Tips for Securing Price Quotes - Request that the vendor provide: Small Purchases Freight costs (fixed or not-to-exceed) For construction/repairs exceeding $1,000, their contractor s license number (to verify a valid license), and proof of insurance Payment terms Net 30 Estimated delivery date after receipt of order Vendor contact information - Set deadline for receipt of quotes: Use fax or for sending and receiving quotes Attach documentation to PR, including no responses 14

15 Small Purchases Tips for Securing Price Quotes DON T: Disclose names of vendors you are contacting, or their pricing, until after PO is awarded. Disclose to vendors how their pricing compares to others. Sign anything other than a delivery ticket. Accept anything of value from vendors (gifts, trips, lunches, etc.). 15

16 Competitive Sealed Bidding Used for the procurement of goods or nonprofessional services where the estimated sum of an individual purchase or the estimated aggregate or sum of all phases reaches or exceeds $50,000. Again, this is a procurement over the informal threshold, which is $50,000 at Chesterfield, but the VPPA allows up to $100,000 therefore, you will need to review your entities policy for thresholds. 16

17 Competitive Sealed Bidding Written solicitation is required, issued by Purchasing Department only; referred to as an Invitation for Bid (IFB). Using Department provides detailed specifications or scope of work. Specifications are reviewed and refined by Purchasing. Contains applicable terms and conditions. Insurance is required as determined by Risk Management. Licensing or certifications as required by law (i.e. contractors, security, etc.). Requires 10 day public notice prior to opening date of bid. 17

18 Competitive Sealed Bidding Pre-bid conference may be necessary. Bids received in the Purchasing Department only. Bids evaluated based on all published requirements. Award to lowest responsive and responsible bidder meeting published requirements. 18

19 Competitive Sealed Bidding (IFB) End user determines a need and submits a PR for over $50,000 PR must be approved by various individuals at the department level days turnaround Purchasing receives the PR, reviews scope of work/specifications with end user and develops the IFB IFB must be publicly posted for a minimum of 10 days Bids are publicly opened, reviewed, and if applicable, bid results sent to department for award recommendation Award recommendation received from the department, Purchasing reviews, contract award and execution and/or PO approved and printed 19

20 Competitive Negotiation Used for the procurement of professional services and selected goods and nonprofessional services where the estimated sum of an individual purchase or the estimated aggregate or sum of all phases reaches or exceeds $50,000. Again, this is a procurement over the informal threshold, which is $50,000 at Chesterfield, but the VPPA allows up to $100,000 therefore, you will need to review your entities policy for thresholds. 20

21 Competitive Negotiation Two processes for competitive negotiation: - Professional Services The competitive negotiation process must be used to procure professional services. Professional Services as defined by the Virginia Public Procurement Act (VPPA) are as follows: Accounting Actuarial Services Architecture Dentistry Land Surveying Landscape Architecture Law Medicine Optometry Pharmacy Professional Engineering - Selected Goods and Non-Professional Services The competitive negotiation process may be used to procure selected goods and non-professional services. Non-professional services are defined as any services not identified above as a professional service. 21

22 Competitive Negotiation Written Request for Proposals (RFP) issued by the Purchasing Department only. The RFP indicates, in general terms, that which is sought to be procured, specifying factors that will be used in evaluating the proposal and any unique capabilities or qualifications that will be required of the contractor. Requires negotiation. Using department/school provides a general description of goods or scope of services. Contains applicable terms and conditions. Requires 10 day public notice prior to the date set for receipt of proposals and advertisement in a newspaper of general circulation in the area in which the contract is to be performed. 22

23 Competitive Negotiation Pre-proposal conference may be required. Proposals received in the Purchasing Department only. Evaluation committee established to review and evaluate responses. Responses evaluated based on published criteria in the RFP. Negotiations conducted with short listed offerors. Award to the offeror, who in the evaluation committee s opinion, has made the best proposal. 23

24 Competitive Negotiation (RFP) End user determines a need and submits a PR for professional services, goods, or non-professional services PR must be approved by various individuals at the department level days turnaround Purchasing receives the PR, reviews scope with end user and develops the RFP RFP must be publicly posted for a minimum of 10 days and advertised in the newspaper Proposals are received and evaluation committee must review and score all proposals Firms are shortlisted Negotiations with firms which may include: demos, site visits, etc. 24 Award recommendation from committee, contract award and execution, PO approved and printed

25 Sole Source Used for purchases of goods/services where only one source is practicably available for the goods or services required. Competition is not available in a sole source situation. - Written justification provided by departments/schools and approval by Purchasing Department is required. - Must be publicly posted for ten days. - Estimated lead time varies depending on research required to confirm sole source status and contract negotiation. SOLE SOURCE FORM 25

26 Emergency For purchases of goods/services where there is an actual or potential disruption related to an essential service or other circumstances when supplies or services are needed for immediate use. There are two categories of emergencies: emergencies that are so significant as to cause an immediate threat to life, health, or property other emergencies, called operational emergencies, affect services but do not threaten life, health, or property 26

27 Emergency Emergency Purchases During Office Hours - If the purchase exceeds $5,000, Department Directors, Principals or Designees must contact the Purchasing Department by calling at the time the emergency situation is identified to obtain an emergency purchase order number authorizing the department to purchase the needed goods or services. Emergency Purchases After Office Hours -Operational emergency purchases over $5,000 shall be subject to approval by the Purchasing Director or designee prior to any commitment with a contractor. Emergencies that threaten life, health, or property would only be subject to prior approval by the Purchasing Director or designee if the amount of the purchase is $50,000 or more. Written justification is required (may be after the fact) Competition is recommended if practicable Public posting of emergencies is required EMERGENCY FORM 27

28 Use of Contracts Requirements Contracts Cooperative Agreements Contract Administration 28

29 Use of Contracts Requirements contracts Contract established for a variety of goods/services that are purchased on a repetitive basis by All Departments, County Only, Schools Only or Selected Departments as indicated. A link to all Chesterfield County contracts can be found at All of our contracts are posted and include whether or not they have cooperative language. 29

30 Use of Contracts Cooperative Agreements Many contracts issued by other public bodies are accessible for our use. For use of contracts awarded in Virginia, the solicitation must contain language as required by the Virginia Public Procurement Act (VPPA). Use of the contract requires contractor consent and Purchasing Department approval. COOPERATIVE PROCUREMENT REVIEW FORM 30

31 Use of Contracts Contract Administration Contract administration is defined as the management of all actions that must be taken to ensure compliance with the terms of the contract after award of the contract. 31

32 Contract Administration Using departments/schools are responsible for contract administration to ensure that the contractor fulfills the obligations of the contract. Contract administration includes, but is not limited to, the following: - Day to day coordination of the delivery of the goods or services; - Obtaining and approving job estimates, verifying labor hours and job classifications; - Certifying receipt of goods or services and that they were delivered in accordance with the contract terms and conditions; - Completing and submitting periodic evaluations of contractor performance; - Assuring that contract amount is not exceeded without proper authorization from the Contract Officer; - Assuring that contract terms and conditions are not extended, increased, decreased or modified in any way without action through the Contract Officer; - Coordinating contract start-up activities with appropriate County personnel; - Recommending solutions to Contract Officer if performance problems or contract issues persist. 32

33 Contract Administration Report specific instances of a contractor s failure to perform, as they occur, to the Purchasing Department through the use of a Incident Report/Report of Performance form. Incident reports are necessary in order for the Purchasing Department to develop a contractor history, evaluate performance and when required, take appropriate and timely action. INCIDENT REPORT FORM 33

34 Receiving Tips Inspect shipments of goods immediately Inspect work performed for service contracts If shipment/service is complete and satisfactory: complete on-line receiving (OneSolution) For purchases over $5,000, if shipment/service is not satisfactory: complete Incident Report Form. 34

35 Change Orders A Change Order is defined as a written alteration to a purchase order (PO) or any other contractual document signed by the purchasing authority that changes the price of the contract, the scope of the work, time of performance, or any other provision within the contract. 35

36 Ethics in Public Contracting Sets forth guidelines for governing conduct of Purchasing personnel and those with official responsibility Official responsibility is administrative or operating authority, whether intermediate or final, to initiate, approve, disapprove or otherwise affect a procurement transaction or any claim resulting therefrom Penalty for Violation - Section of the VPPA Any person convicted of a willful violation of any provision of this article shall be guilty of a Class 1 Misdemeanor. Upon conviction, any public employee, in addition to any other fine or penalty provided by law, shall forfeit his employment. 36

37 Relationships with Vendors Responsibilities of Departments/Schools Employees involved in any aspect of a purchasing decision are forbidden to solicit or accept money, gifts, meals, or entertainment from vendors. Employees shall conduct themselves in a manner that avoids the appearance of impropriety. going to lunch with current/potential contractor (regardless of who is paying) allowing a vendor to provide food, prizes or giveaways during training, professional development, or any functions allowing vendor to pay for travel expenses for an employee to attend offsite training or events accepting tickets from a vendor to any type of entertainment 37

38 SAF CCPS PROCUREMENT QUICK REFERENCE GUIDE GOODS AND NON-PROFESSIONAL SERVICES PURCHASED WITH STUDENT ACTIVITY FUNDS Dollar Limit Action Required Up to $2,000 Process order on a school activity fund purchase requisition/order form. Over $2,000 Under $5,000 The principal, or designee, must obtain a minimum of three (3) telephone inquiries to be recorded on the Telephone Inquiry section (Exhibit 5-A) or obtain three (3) written quotes. The school s purchase requisition/order may be issued only to the lowest responsive and responsible vendor. Any exception to the lowest vendor must be documented in writing and placed in the school file. $5,000 - Under $15,000 The principal, or designee, must attach a minimum of three (3) written quotes to the purchase requisition/order form. The school s purchase requisition/order may be issued only to the lowest responsive and responsible vendor. Any exception to the lowest vendor must be documented in writing and placed in the school file. $15,000 and above The principal must prepare adequate specifications for the item to be purchased and process the order through In Focus. Workflow will in turn route it to County Purchasing for approval. Purchasing will then obtain appropriate competition and provide the recommendation as to the lowest responsible bidder. Any exception to the lowest vendor must be documented in writing. After approval by County Purchasing, Purchasing will then issue the purchase order and place it with the vendor. A check for the amount of the order and a copy of the PO00010: (Purchase Order Status) from In Focus should be sent to Budget. 38

39 SAF CONTINUED EXCEPTIONS 1. Bands, banquets, theatre plays, skating parties or similar activities of students should be noted as student choice. 2. Services related to yearbooks, photography, class rings, and senior accessories must be purchased from one of the vendors that have been awarded a contract by the school system through County Purchasing. The contract number must be written on the purchase/requisition order. 3. For goods and services costing less than $15,000: upon determination that there is only one source available for the good or service to be procured, a contract may be negotiated and awarded to that source without competition. Any such purchase must be fully documented and maintained in the school file. Determinations of $15,000 or more must be made by the County Purchasing Director. 4. If a purchase of $15,000 or more is covered by an approved county contract, then the school may issue the purchase requisition/order directly. The contract number must be written on the purchase/requisition order. 5. Regardless of price, orders for the following must be processed through County purchasing procedures: radio equipment; telecommunications equipment; vehicles. 6. Computer hardware and software is processed through In Focus, but it must contain the appropriate object code in order for it to be sent to Department of Technology for approval (refer to the In Focus School Workflow Object Codes resource for appropriate code). Technology will place the order with the vendor. A check for the amount of the order and a copy of the PO00010: (Purchase Order Status) from In Focus should be sent to Budget. 7. The purchase of Smart Phones and the first month s service must be processed through In Focus, but it must contain the appropriate object code in order for it to be sent to Department of Technology for approval (refer to the In Focus School Workflow Object Codes resource for appropriate code). Technology will place the order with the vendor. Smart Phone monthly service may be processed on a school activity fund purchase requisition/order. 8. Audiovisual equipment, regardless of price, may be processed on a school activity fund purchase requisition/order, but must be sent to the Financial Compliance Coordinator for approval (via ) 39 prior to placing the order with the vendor.

40 Additional Resources for Purchasing Information Additional Resources available by 40

41 Questions and Answers 41