Procurement. Pete McLoughlin Financial Management Section Head Office for Food and Nutrition Programs

Transcription

1 Procurement Pete McLoughlin Financial Management Section Head Office for Food and Nutrition Programs

2 USDA Non-Discrimination Statement In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, sex, disability, age, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA. Persons with disabilities who require alternative means of communication for program information (e.g. Braille, large print, audiotape, American Sign Language, etc.), should contact the Agency (State or local) where they applied for benefits. Individuals who are deaf, hard of hearing or have speech disabilities may contact USDA through the Federal Relay Service at (800) Additionally, program information may be made available in languages other than English. To file a program complaint of discrimination, complete the USDA Program Discrimination Complaint Form, (AD-3027) found online at: and at any USDA office, or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights 1400 Independence Avenue, SW Washington, D.C ; (2) fax: (202) ; or (3) program.intake@usda.gov. 2 This institution is an equal opportunity provider. Massachusetts Department of Elementary and Secondary Education

3 Procurement What s New? National focus on procurement policies Training will be the focus of SY15-16 (Spring) and moving forward. Procurement reviews are scheduled to begin in SY Massachusetts Department of Elementary and Secondary Education

4 Procurement for Nutrition Programs Why More Emphasis? Because of the strong belief that the procurement process should be open to all capable contractors who want to do business with the Federal Government and If the playing field is level, vendor participation is encouraged The cost of products and services will be lower in price Better quality products and services will result 4

5 Training Objectives Explain the procurement process and methods Help you learn to apply the procurement process and methods to real world situations Identify the regulatory requirements and how to find and apply them Provide a high level overview of the Procurement Review process.

6 What is Procurement? The act of obtaining of goods or services in exchange for money or value

7 Procurement: A Multi-Step Process Procurement procedures Forecasting Selecting the proper procurement method Developing a solicitation Advertising the solicitation Evaluating proposals/offers Awarding the Contract Managing the Contract

8 Procurement Procedures Why are they important? Required by regulations Helps to determine procurement methods to be used Identifies parties that will address issues raised Prohibits conflicts of interest Written code of standards of conduct

9 Forecasting It makes sense that before purchasing for programs an SFA must plan and evaluate: Food service operations Food service needs

10 Forecasting: Evaluate Operations Evaluate the current food service operation to determine needs Self-Op/Central Kitchen/FSMC Storage capacity Processing abilities Resources- financial, staff, other Food safety practices Prior year menus Inventory

11 Selecting the Proper Procurement Method Small Purchase Threshold Micro-purchasing Competitive Sealed Bidding Competitive Negotiation Noncompetition negotiation

12 Informal Procurement Method (Small Purchase Threshold) Procurement contract currently set at under $150,000 in value States or localities may set a lower small purchase threshold under $35,000 for MASS Or procurements below the micro-purchase threshold currently set at $3,500 in value

13 Formal Procurement Methods Value of purchase exceeds Federal, State, or local threshold for small purchases More rigorous and prescriptive: Competitive Sealed Bidding (i.e., IFB) Competitive Negotiation (i.e., RFP) Allows for the identification of evaluation factors and their relative importance

14 Solicitations Once the decision is made regarding what goods and services are needed and the appropriate method to acquire them, a solicitation must be developed which contains specifications & all necessary contract elements

15 Solicitation Overview The description and scope needs to be in line with what is being procured (i.e., procuring processor, FSMC, purchased goods through a distributor, etc.) Must be clearly stated so that bidders will understand and can be responsive to the need Identify all of the requirements that offerors must fulfill, so that changes do not need to made to the contract after award has been made

16 Writing Clear and Thorough Specifications Product Name Variety Grade Size Quantity Quality Cleanliness Packaging Delivery Food Safety Farm Practices and Characteristics Other requirements based on product or service

17 Sections of a Solicitation Contract Type Introduction/Scope General Descriptions of Goods and Services Timelines and Procedures Technical Requirements Evaluation Criteria (for RFP only)

18 Advertising the Procurement The content of the solicitation announcement should be sufficient enough in scope to allow bidders/offerors to identify: The general nature of the goods or services to be procured; The method of procurement that will be used (formal or informal); How they can obtain the solicitation or more information; and The due date for responses to the solicitation.

19 Advertising the Procurement: Due Dates When determining due dates, keep in mind: Complexity of the solicitation requirements; Time needed for pre-bid/award meetings, site visits, etc; and Federal Due dates: FSMC for all programs except SFSP at least 21 days in advance of due date* FSMC for SFSP at least 14 days in advance of bid opening* In absence of applicable State or local laws, other solicitations should be publicly announced at least 21 days before the response is due, unless an emergency or good cause exists for expediting the acquisition. *NOTE: USDA recommends using a time period of 4-6 weeks.

20 How to Advertise To allow for Free and Open Competition, use the following ways to advertise your solicitation: State, regional, or nation-wide newspapers Trade periodicals Designated internet sites Direct mailings (informal only) Other print media that serves the business community and general public

21 Evaluating the Proposals: Ensuring Responsive and Responsible Contractors Responsive Vendor s products or services meets the SFA s specifications. Responsible Vendor can and will successfully fulfill the terms and conditions of the proposed procurement.

22 Responsible? Determine if a contractor is responsible by investigating the contractor s: Integrity; Compliance with public policy; Record of past performance; and Financial and technical resources If it is determined that the contractor is NOT responsible: Carefully document decision Contractor becomes ineligible for award.

23 Awarding the Contract Legally ensures commitment Provides record of the deal Fulfills numerous regulations

24 Basic Contract Elements Contract Duration Identification of the Contract s parties Scope of Work Product Specifications Type of Contract Renewal Options Modification and Change Procedures Default and Breach provisions, remedies, penalties Termination rights

25 Contract Elements continued Required Compliance certifications and sanctions Recordkeeping requirements Laws and Regulations that govern the contract In cost reimbursable contracts, ensure that all costs are net of all discounts, rebates and credits Clear Methodology for tracking costs Any Sanitation and Licensing requirements Professional Certification requirements or minimum levels of experience or education

26 Managing the Contract This ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts, and allows for adequate and timely follow-up of all purchases. Procurement procedures Forecasting Selecting the proper procurement method Developing a solicitation Advertising the solicitation Evaluating proposals/offers Awarding the Contract Managing the Contract

27 Managing continued The SFA must monitor contractor performance to make sure it: Receives the quantity and quality of the goods and services requested; Receives the goods and services on time; and Is charged correct prices as bid and within budget.

28 SFA Responsibilities Ultimately, it is the SFA s responsibility to follow each of these Procurement Process steps. The SFA is NOT to be guided by vendors opinions or requests.

29 Procurement Regulations and Where to Find Them CONGRESS OMB USDA/FNS State SFA

30 Super Circular 2 CFR 200 (formerly 7 CFR Parts 3016 and 3019 and OMB Circulars A-21, A- 50, A-87, A-89, A-102, A-110, A-122 and A-133) Guidance is located in Title 2 of the Code of Federal Regulations The Guidance: o Was published December 26, 2013 o Will be in effect for all federal awards or funding increments to nonfederal entities on or after December 26, 2014 o Will apply to nonfederal entity audits for fiscal years beginning on or after that date.

31 Super Circular 2 CFR Streamlines guidance for federal awards to ease administrative burden Supersedes and streamlines requirements contained in OMB Circulars A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133 by consolidating the requirements of these eight documents into one. Eliminates duplicate and conflicting guidance between circulars

32 Super Circular 2 CFR Part Methods of Procurement 2 CFR Part Raised the small purchase threshold to $150,000 Introduced a Micro-Purchase method from the Federal Acquisition Regulations (FAR) Enables Program operators to make purchases without obtaining competitive quotations, provided: Aggregate value does not exceed $3,500 ($2,000 if Davis-Bacon Act applies construction); and Competition is achieved by distributing micro-purchases equitably among qualified suppliers.

33 Super Circular 2 CFR Part Small Purchase Methods: Threshold is for purchases above $3,500 to less than or equal to $150,000 Relieve Program operators of the cost, time, and administrative complexity intrinsic to more formal procedures such as sealed bids and competitive proposals Competition is still required Competition is obtained by price quotations from an adequate number of qualified suppliers before purchasing

34 Super Circular 2 CFR Part Purchases greater than the small purchase threshold Commonly called formal methods 2 Procurement Methods Sealed bids Competitive Proposals Written procedures required for technical evaluation and contract selection must be included in the competitive proposal method.

35 Informal Formal Methods Micro Purchases Procurement by Small Purchase Procedures Sealed Bids (IFB) (formal) Competitive Proposals (RFP) (formal) Non-competitive Proposals Regulations Procedures in a nutshell (a) Purchases not exceeding $3,500, may be awarded without soliciting competitive quotations if price is reasonable (b) Purchases not exceeding applicable Small Purchase Threshol d (Fed=$150,000). Minimum of three price quotes (c)(1)(i-iii) (c)(2)(i-v) Technica l specifications Advertise bid Public bid opening Award on price alone firm fixed price (d)(1) (f)(1) Solicitation includes evaluation criteria. Award based on score with primary weight on price (not price alone) Item available only from a single source; public exigency; competition deeme d inadequate SA oversight Assurance of reasonable and necessary costs; purchases distributed equitably among qualified suppliers; Buy American; documented Assurance of competition; Buy American; documented Assurance of advertising, bid opening, resulting in fixed price contract (required provisions-- 7 CFR Part 210, 2 CFR Part 200, Appendix 2 Part 200) Assurance of advertising, proper evaluation/award, results in fixed price or cost reimbursable contract (required contract provisions--7 CFR Part 210, 7 CFR Part 200, Appendix 2 Part 200) SA must assure SFA receives discounts, rebates and credits in cost reimbursable contracts Assure adherence to (f)(1)

36 Massachusetts Department of Elementary and Secondary Education 36

37 The Procurement Review - What we will look for Policy Memos o Standards of Conduct o Written Procurement Procedures o Methods of Procurement Micro Purchasing (if SA has implemented Super Circular/2 CFR 200) Small Purchase Procedures Seal Bids/Competitive Proposals Noncompetitive Proposals o Required contract provisions o Contractor performance monitoring

38 What we will look for LEA Procurement Plan o Is there a procurement plan? If no, this is a finding and a TA opportunity. If yes, o Does it comply with the requirements in the CN and appropriate regulations and OMB Circulars? o Are there provisions in opposition to above? o Must use its own documented procurement procedures which reflect applicable Federal, State, and local laws and regulations 7 CFR (b)/

39 Written Procedures Procurement Plan Code of Conduct / Purchasing Ethics Acquisition Threshold State and Local regulations Procedures scoring, awarding, monitoring Grievances / Bid Protest Procedures

40 What will we look for? Is there a Standard of Conduct included in the Procurement Plan or in a separate document? o Standards of Conduct o Prohibit real, or apparent, conflicts of interest if Employees, officers or agents engaged in: o Selection, award, or contract administration o No soliciting or accepting gratuities, favors, or anything of monetary value o Financial interest is not substantial or the gift is unsolicited and of nominal value o Disciplinary action for violations

41 Conflict of Interest

42 Let s take a look Procurement Methods 1. Small Purchases (Informal) 2. Sealed Bids (Formal) 3. Competitive Proposals (Formal) 4. Non-Competitive Proposals

43 What we will look for o Methods of Procurement Small Purchase Procedures ($0.00-$150,000). State is up to $34,999. Seal Bids/Competitive Proposals (above $150,000). State $35,000 or more. Non-competitive Proposals (above $150,000). State $35,000 or more. Required Contract Provisions, as applicable

44 What we will look for o Contract provisions Bonding (7 CFR (h)) Debarment (7 CFR 3017) Lobbying (7 CFR 3018)

45 What we will look for Other contract provisions; CFR (i)/ the procedures for addressing a Breach of contract 7 CFR FSMC solicitations and (f) - Buy American, cost-reimbursable contract provisions, if applicable, and geographic preference, if applicable. 7 CFR (d)/53 - Donated/USDA Foods storage/contract provisions

46 Informal Procurement Simplified Acquisition Threshold What we will look for Documentation demonstrating the SFA/LEA obtained multiple quotes. Written Specifications used to solicit quotes. Documentation of the prices quoted (e.g. an Informal Procurement Log) A contract or documentation outlining the agreed upon expectations from this solicitation.

47 What we will look for Vendor paid list/statement of expenses Quotes obtained Invoices/Receipts Purchase orders Other appropriate documentation

48 Formal : Sealed Bid Sealed bids - Required when: Valued > $150,000 Small acquisition threshold (SAT). State requirement is $35,000 or more Published Invitations for Bid (IFB) Advertised Opened publicly Identify responsive, responsible bidder with the lowest-price Award a firm, fixed-price contract

49 What we will look for Original Solicitation issued Responses received Any additional documentation issued prior to awarding a contract Awarding documentation/ announcements The contract and documentation showing the contract requirements are being or have been met.

50 What we will look for in the Solicitation? Scope of the solicitation Required Federal Provisions from: o 7 CFR 210/250 o 7 CFR or 2 CFR 200 Terms and conditions to be a responsive and responsible respondee Appropriately written product or service specifications and estimated quantities

51 What we will look for in the responses? Documentation determining if: o Bidder was responsive and responsible; if not, the reason. o Bidders included value-added, overly responsive, or unallowable cost provisions and were still considered for award. o If questions were received were the responses issued to all respondents prior to the bid opening or awarding the contract?

52 What we will look for. Bid award Was the bid awarded to the lowest responsive and responsible bidder? Was a protest to the award filed?

53 Formal: Competitive Proposal Used when: Valued > $150,000. State requirement is $35,000 or more Published Request for Proposal (RFP) Includes Technical Evaluation and scoring of Proposals (separate Technical proposal and Price proposal) No public opening/must safeguard responses Identify proposal most advantageous to the Program, with price and other factors considered Price must be the primary consideration Award either a fixed-price or cost-reimbursable contract

54 What we will look for Original Solicitation issued to review: o Scope o Specifications for products or services o Evaluation Scoring and Criteria Responses o Notes of this evaluation and scoring process for contract award o Any additional documentation issued prior to awarding a contract

55 What we will look for Awarding documentation/announcements The contract and documentation showing the contract requirements are being or have been met. Required Federal Provisions from: o 7 CFR 210/250 o 7 CFR o 2 CFR 200

56 What should be in the responses? Terms and conditions to be responsive and responsible Appropriately written product or service specifications Determination documentation determining if bidder was responsive and responsible; if not, the reason.

57 What other documentation prior to the award? Are bidders including value-added or overly responsive items, or unallowable costs and the response is still being considered for award. If questions were received, were the responses issued to all respondents prior to awarding?

58 Noncompetitive proposals Single/Sole Source: rationale & approval required Emergency Procurement

59 Noncompetitive proposal SA expressly authorizes noncompetitive proposals in response to a written request from the non-federal entity/sfa After solicitation of a number of sources, competition is determined inadequate.

60 What we will look for Contractor Performance Monitoring o What procedures are in place to monitor contracts? Who monitors contracts? What is monitored? When? (before payment is authorized) How?

61 Questions?? 61 Massachusetts Department of Elementary and Secondary Education