MANAGING THE SOLE SOURCE CONUNDRUM ACI-NA SPRING LEGAL AFFAIRS CONFERENCE APRIL 26, 2012

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Jerome Ball
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1 MANAGING THE SOLE SOURCE CONUNDRUM ACI-NA SPRING LEGAL AFFAIRS CONFERENCE APRIL 26, 2012

2 OR... How to avoid actual or perceived fraud, corruption, and favoritism

3 Justification of a Sole Source Good project management: Train your client! Administrative/institutional checks and balances Legislation

4 Commodity Purchases San Francisco has centralized purchasing under the City Administrator to promote standardization, efficiency, and economy of scale The Purchaser has the authority to determine that a product is a sole source for acquisitions up to $10 million. (SFAC 21.5.) The Board of Supervisors must approve contracts in excess of $10 million or 10 years.

5 Patented or Proprietary Commodities Administrative check and balance: For patented or proprietary Commodities sold by brand name, the Purchaser may require each department requisitioning same by such brand name to furnish specification of the Commodity requisitioned, and may advertise for Offers on the basis of such specifications, under conditions permitting manufacturers of, or dealers in other products made and sold for the same purpose, to make Offers on such specifications on the specifications of their product. If the Purchaser recommends the acceptance of the lowest or best Offer, stating the Purchaser s reasons in writing therefor, and if the department head concerned recommends the acceptance of any other Offer on such proprietary Commodities, stating the department s reasons in writing therefor, the award shall be determined by the Controller. (SFAC 21.03(d).)

6 Technology Purchases San Francisco Technology Store The Purchaser awards multiple contracts to pre-approved vendors of technology equipment and services City departments solicit competitive quotes from Technology Store vendors

7 Technology Purchases, cont. General legislative authorization to execute perpetual, nonexclusive software licensing agreements which warrant performance of software... Where a vendor has proprietary rights to software or where maintenance of equipment by a particular vendor is required to preserve a warranty, software support and equipment maintenance agreements entered into with that vendor shall be treated as a sole source. (SFAC )

8 Technology Purchases, cont. Q: At what point is an update a new product which should be subject to competitive procurement? A: It depends...

9 Construction Services California Public Contract Code 3400 State law sole source justification: (1) field test or experiment to determine whether a product is suitable for future use; (2) match an existing product in a public improvement; (3) a necessary item available only from one source; (4) emergency Under San Francisco local law, departments must obtain Board of Supervisors approval for a public work or related professional services sole source

10 Construction Services, cont. Use of the or equal specification Caution to your Project Manager: Do not use a manufacturer s specification as your own Consider or equals in good faith Set time prior to bid to approve an or equal so that all bidders would have the opportunity to price the alternative product Limit time after award to propose an equal to allow for possible cost/time savings

Organizational Conflicts of Interest An organizational conflict of interest exists when a consultant or contractor has a financial interest in a future contract (see 48

11 Organizational Conflicts of Interest An organizational conflict of interest exists when a consultant or contractor has a financial interest in a future contract (see 48 CFR 9.500, et seq.) In other words, when a consultant or contractor transforms itself into a sole source through its integration into the government s decision-making process

12 OCIs, cont. Avoid organizational conflicts of interest through vigilance and training of your project management staff Retain consultant in original role

This policy will outline the requirements for competitive bids on goods and services purchased by the College.

This policy will outline the requirements for competitive bids on goods and services purchased by the College. Policy Name: Procurement Sole Source/Competitive Bid Policy Updated/Reviewed: August 10, 2017 Effective Date: November 15, 2010 Office with Primary Responsibility: Procurement Services Offices with Secondary