PROCUREMENT OVERVIEW. State of Louisiana Division of Administration Office of State Procurement

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1 PROCUREMENT OVERVIEW State of Louisiana Division of Administration Office of State Procurement

2 PURPOSE Guidelines (laws, rules, policies, executive order) Methods of Procurement Competitive Process Emergency Procurement Specification Writing OSP Website

3 CENTRALIZATION Refers to the merger of Executive Branch Agencies and Offices procurement staffs and functions into the DOA s Office of State Procurement.

4 Included staff from the following agencies: Office of Group Benefits Department of Revenue Department of Public Safety Department of Corrections Department of Natural Resources Department of Health & Hospitals (now LDH) Department of Children & Family Services Department of Transportation & Development Department of Education Department of Environmental Quality Department of Wildlife & Fisheries Division of Administration Coastal Protection & Restoration Agency

5 What Governs Procurement?? La. Revised Statutes 39: Procurement Code Louisiana Administrative Code Title 34 Rules & Regs Small Purchase Executive Order

7 Procurement Code Creates Central Purchasing Agency (OSP) Names State Chief Procurement Officer as its head Gives Chief Procurement Officer authority to procure all supplies & operating services, unless otherwise provided in law Provides for centralization of procurement by state agencies

8 Procurement Code Exempt Agencies Listed in R.S. 39:1572 Non-Exempt Agencies

9 What Governs Procurement?? La. Revised Statutes 39: Procurement Code Louisiana Administrative Code Title 34 Rules & Regs Small Purchase Executive Order

10 Title 34, Government Contracts, Procurement and Property Control Last amended June 2016, compiled June 2016

11 Purchasing Rules and Regulations Title 34 GOVERNMENT CONTRACTS, PROCUREMENT AND PROPERTY CONTROL Part V. Procurement EDITOR S NOTE: In accordance with provisions of the Administrative Procedure Act, R.S. 49:950 et seq., the Office of the Governor, Division of Administration, Office of State Procurement, has amended Chapters 9, 25, and 31, Procurement, of LAC 34:V. The Rules were revised to align with Act 864 of the 2014 Regular Legislative Session, effective January 1, The Act amended and reenacted R.S.3:4(B)(1)(b), and chapter 17 of subtitle III of title 39 of the Louisiana Revised Statutes of 1950, to be comprised of R.S. 39:1551 through 1755, and repealed chapter 16 of subtitle III of title 39 of the Louisiana Revised Statutes of 1950, comprised of R.S. 39:1481 through The amended and reenacted statutes effectively combined Louisiana s procurement of personal, professional, consulting and social services provisions (formerly chapter 16 of title 39) and provisions for the purchasing of supplies, services and major repairs, into the Louisiana Procurement Code (chapter 17 of title 39). All authority, duties and responsibilities formerly residing with the Office of Contractual Review and the Office of State Purchasing were placed under a new central purchasing agency identified as the Office of State Procurement. Revisions to the rules brought them into compliance with the new law by eliminating any outdated references to offices which no longer exist. Therefore, effective January 1, 2015, any reference to the Office of Contractual Review or the Office of State Purchasing, which still remain in the rules, will refer to the Office of State Procurement. Chapter General Purpose and Policies [Formerly LAC 34:I.301] Procurement of Supplies, Services, and Major Repairs A. Definition and Purpose 1. Specification any description of the physical functional, or performance characteristics, or of the nature of a supply, service, construction or major repair item. The specification includes, as appropriate, requirements for inspecting, testing, or preparing a supply, service, or construction item for delivery. Unless the context requires otherwise, the terms specification and purchase description are used interchangeably throughout these regulations. 2. The purpose of a specification is to serve as a basis for obtaining a supply, service, or major repair item adequate and suitable for the state's needs in a cost effective manner, taking into account, to the extent practicable, the costs of ownership and operation as well as initial acquisition costs. It is the policy of the state that specifications permit maximum practicable competition consistent with this purpose. Specifications shall be drafted with the objective of clearly describing the state's requirements. 3. All definitions as listed in R.S. 39:1556 and R.S. 39:1591 will apply. B. Nonrestrictiveness. All specifications shall be written in such a manner as to describe the requirements to be met, without having the effect of exclusively requiring a proprietary supply, service, or major repair item, or procurement from a sole source, unless no other manner of description will suffice. In that event, a written determination shall be made that is not practicable to use a less restrictive specification. C. Preference for Commercially Available Products. It is the general policy of this state to procure standard commercial products whenever practicable. In developing specifications, accepted commercial standards shall be used and unique requirements shall be avoided, to the extent practicable. D. Escalation and De-Escalation Clauses. Bid specifications may contemplate a fixed escalation or de-escalation in accordance with a recognized escalation index. AUTHORITY NOTE:Promulgated in accordance with R.S. 39:1581. HISTORICAL NOTE: Promulgated by the Office of the Governor, Division of Administration, Office of State Purchasing, LR 21:566 (June 1995), repromulgated LR 40:1347 (July 2014), LR 40:2547 (December 2014) Availability of Documents [Formerly LAC 34:I.303] A. Specifications and any written determination or other document generated or used in the development of a specification shall be available for public inspection pursuant to R.S AUTHORITY NOTE:Promulgated in accordance with R.S. 39:1581. HISTORICAL NOTE: Promulgated by the Office of the Governor, Division of Administration, Office of State Purchasing, LR 21:566 (June 1995), repromulgated LR 40:1347 (July 2014), LR 40:2547 (December 2014) Authority to Prepare Specifications [Formerly LAC 34:I.305] A. Statutory Authority of the Chief Procurement Officer and State Agencies. The chief procurement officer is authorized to prepare specifications in accordance with R.S. 39:1652, subject to the authority granted purchasing agencies in R.S. 39:1653 of the Louisiana Procurement Code. B. Delegation of Authority to State Agencies. The chief procurement officer may delegate in writing the authority to prepare and utilize specifications to purchasing agencies and using agencies for any type of supplies, services, or major repairs provided such delegations may be revoked by the chief procurement officer.

13 What Governs Procurement?? La. Revised Statutes 39: Procurement Code Louisiana Administrative Code Title 34 Rules & Regs Small Purchase Executive Order

15 Procurement Handbook The handbook contains information that should help buyers process their daily procurement needs. It contains check lists of many procurement processes and should be used as a guide, but does not override any statute, rule and regulation, executive order, policy or procedure. It can be found under the Agency Center Publications section of our website.

16 Delegated Purchasing Authority

17 Delegated Purchasing Authority What is DPA?

18 Delegated Purchasing Authority What is DPA? Formal written delegation from the Chief Procurement Officer Amount based on purchasing personnel, experience, training, performance

19 The Procurement Cycle Need for product or service is determined Specifications are developed Requisition is submitted Sourcing Method is determined and Solicitation is developed Solicitation is scheduled, advertised and sent to vendors Addenda are issued when needed Bids are opened and evaluated Purchase orders are sent to vendors Goods or services are delivered

20 Working Together The key to success throughout the procurement cycle is through teamwork with all of your customers so that the State receives goods and services in a prompt efficient manner while getting the best value for their dollar.

21 Methods of Procurement Statewide Contracts Types - Brand Name, LaMAS, Multi- State/Cooperative Purchasing Formats itemized, discount from price list, catalog LAPS mandatory/non-mandatory Contract Search/LA ecat

23 Prison Enterprise and Sheltered Workshop Contracts Prison Enterprise Sheltered Workshop Contract No Contract No Agencies may issue a contract release order Agencies may issue a contract release order Service Contracts Sans Janitorial (Recently added)

24 Methods of Procurement Small Purchase (< $25,000) Exempt per Executive Order Fax Bids Competitive Sealed bid ITB Invitation to Bid Request for Proposals - RFP

25 Small Purchase Executive Order Small Purchase Executive Order JBE The Small Purchase Executive Order has multiple sections. This executive order is available on OSP s website under the Legal tab.

26 Definition of a Small Purchase Any procurement not exceeding twenty-five thousand dollars ($25,000) or any procurement of those items listed in Section 5 of the executive order, which are exempt from the competitive sealed bidding requirements of the Procurement Code

27 New to this Executive Order There are now pricing limitations set on the exemptions listed in Section 5

When requirements are waived >$15,000 but not >$25,000 5 quotations by

28 Quotation Thresholds $5,000 no competition required >$5,000 but not >$15,000 3 quotations by telephone, facsimile, or other means Special requirements When requirements are waived >$15,000 but not >$25,000 5 quotations by facsimile or written means for 3 days Special requirements When requirements are waived

29 Split Purchasing is Prohibited!! Purchases shall not be artificially divided within a cost center to avoid the competitive process

30 $3500 P-Card Purchase $ PO = Split Purchase

31 Purchases Exceeding Small Purchase Limit (>$25,000) Competitive sealed bid Procedures per RS 39:1594.B; Rules & Regulations Section 5 Must be advertised in newspaper and posted to LaPAC Request for Proposal Procedures per R.S. 39:1595 Must be advertised in newspaper and posted to LaPAC

32 Sole Source Other Methods of Procurement Proprietary Purchase Emergency Purchase Used Equipment

33 SOLE SOURCE REVISED STATUTE 39:1597 states that : A contract may be awarded for a required supply, service, or major repair without competition when, under regulations, the chief procurement officer or his/her designee above the level of procurement officer determines in writing that there is only one source for the required supply, service, or major repair item. Sole Source purchase means that there is one Brand, one Supplier, one Distributor.

34 When your agency request a Sole Source purchase they must submit: 1. Letter justifying why the purchase must be restricted to one vendor/manufacturer. 2. Firm Quote from the vendor/manufacturer for requested product. 3. Letter on company letterhead from the vendor/manufacturer stating they are the only source for a particular product. 4. A Published Price List or Signed & Notarized listing of the manufacturer s prices

PROPRIETARY PURCHASE A proprietary purchase is similar to a sole source in that a particular product is the only one that will meet the needs of the agency, but the

35 PROPRIETARY PURCHASE A proprietary purchase is similar to a sole source in that a particular product is the only one that will meet the needs of the agency, but the manufacturer has chosen to distribute his product through more than one distributor. ********************************************************************* Must be bid!!

36 Proprietary purchase means: That there is One Brand and One Supplier, But more than one Distributor Letter justifying why the purchase must be restricted to one vendor/manufacturer. Specifications must be exact to that requested. An approved proprietary purchase must be declared in the solicitation. Such as: This Solicitation has been approved as a proprietary purchase and only bidders meeting these exact specifications/brand will be considered for an award.

37 To renew a Sole Source or Proprietary file, new letters of justification from the agency and the vendor are needed to determine if the justifications are still valid.

USED EQUIPMENT As a general rule, an agency should procure new equipment, but sometimes it is necessary or advantageous to purchase used equipment.

38 USED EQUIPMENT As a general rule, an agency should procure new equipment, but sometimes it is necessary or advantageous to purchase used equipment. The most common reasons are: The inability to secure new equipment The lack of adequate funds for new equipment Used equipment that will satisfy the agency s need is available at a substantial savings.

39 USED EQUIPMENT The purchase of Used Equipment falls under Conditions for the Use of Sole Source Procurement as defined in the Rules and Regulations: Title 34, Chapter 9, Section 905B and R.S 39:1645.

40 USED EQUIPMENT The head of the agency, college or university shall certify in writing to the Director of State Procurement the following (regardless of cost): 1. the price for which the used equipment may be obtained; 2. the plan for maintenance and repair of the equipment and the cost thereof; 3. the savings that will accrue to the state because of the purchase of the used equipment; 4. the fact that following the procedures set out in the Louisiana Procurement Code will result in the loss of the opportunity to purchase the equipment.

41 EMERGENCY PURCHASES TWO TYPES OF EMERGENCIES: Catastrophic When the Governor Declares a State of Emergency Documentation Emergency Contracts Usual Emergencies Brought about during the normal course of business; R.S. 39:1598 and LAC 34:

42 Emergency Procurement An emergency condition is a situation which creates a threat to public health, welfare, safety, or public property such as may arise by reason of floods, epidemics, riots, equipment failures, or such other reason as may be proclaimed by the chief procurement officer. The existence of such condition creates as immediate and serious need for supplies, services, or major repairs that cannot be met through normal procurement methods and the lack of which would seriously threaten: 1. The functioning of Louisiana Government 2. The preservation or protection of property; or 3. The health or safety of any person

43 The Chief Procurement Officer may request an emergency purchase if situation involves possible threat to public health, welfare, safety or public property Agency should contact OSP for direction

44 Written Quotations Every effort shall be made to obtain quotations from three or more vendors when supplies, services, or major repairs are to be purchased on an emergency basis. This does not apply to standard equipment parts for which prices are established. Any offer accepted shall be confirmed in writing.

45 Determination Required Written determination that the basis of the emergency procurement was necessary must be made from the CPO or its designee and be included in the file prior to the purchase or as soon as possible.

46 Emergency Procurement is limited to only those supplies, services, or major repair items necessary to meet the emergency.

47 A record of the emergency procurement shall be maintained that lists: Each Contractor s name and phone number The amount and type of each contract A listing of the supplies, services, or major repairs procured under each contract The identification number of each contract file The record of emergency purchases for the previous fiscal year shall be submitted to the Legislature at the beginning of the legislative session. State Agency Procurements that exceed an agency s DPA must receive prior approval from the Office of State Procurement.

48 CATASTROPHIC EMERGENCIES Once the Governor declares a State of Emergency, he will issue an Executive Order outlining the procedures to be followed. Purchases made for such emergencies should be well documented; include receipts, invoices, purchase orders; rental agreements, etc. which will serve as a basis for settlement of claims and support the State s request for Supplemental federal assistance. Seek OSP Statewide emergency contracts, which should provide the best pricing **See LA ecat for complete information**

49 SPECIAL COMMODITIES Telecommunications Information Technology Printing Labor and material project purchases $5,000 or more Vehicles Used Equipment Elevator Maintenance

50 Definition of a Specification Any description of the physical, functional, or performance characteristics, or of the nature of a supply, service, construction or major repair item. Purpose of a Specification Specifications To serve as a basis for obtaining products or services suitable for the state s needs in a cost effective manner. Revised Statute 39: Proc. Code (LAC 34:Part V.Ch3) Revised Statute 38:

51 Specification Process Should: Streamline the process Promote Competition Solicit Vendor Expertise

52 Characteristics of Good Specifications Simple Clear Accurate Competitive Measurable and verifiable Promote overall economy for the purposes intended Encourage competition by describing requirements without being restrictive (proprietary must be justified) Procure standard commercial products where practicable Obtain quality products and services at the best price

53 Specification Writing Principles & Techniques Leave out brochure language Begin description with common name Include enough detail Avoid ambiguity Use current brand and model - add or equal Industry test methods Size and weight Sample requirements Define delivery, warranty, or training requirements Identify instructional materials or service manuals Define compatibility Define packaging, size, finish, and color Define installation Define maintenance requirements Define options Indicate performance indicators Eliminate unnecessary mandatory requirements Never assume Literature, training and insurance Long technical specifications

54 Understand the use of the following words: Shall - imperative May - permissive And - both or multiples Or - either is acceptable And use them as the criteria for your evaluation Specify award formulas Use appropriate unit of measure Don t mix specifications with instructions to bidders or terms and conditions Use active versus passive voice Each jet burner shall be 90,000 BTUs vs. 90,000 BTUS shall be used

56 Louisiana s Small Entrepreneurship Programs (Hudson & Veteran Initiatives) The Louisiana Initiative for Small Entrepreneurships (the Hudson Initiative) was established during the 2005 Regular Session of the Legislature in accordance with LRS 39:2001 through 2008 and LRS 51:931. The Veteran-Owned and Service-Connected Disabled Veteran-Owned Small Entrepreneurship (the Veteran Initiative) was established during the 2009 Regular Session of the Legislature in accordance with LRS 39:1771 thru These Initiatives are designed to target Louisiana-based small entrepreneurships in procurement and contracting opportunities. The Initiatives are under the auspices of the Division of Administration. All State Agencies (including Colleges and Universities) are responsible for the overall operation and implementation of the Initiatives. The Office of State Purchasing is facilitating the implementation of the Initiatives.

57 CERTIFICATION OF BUSINESS IS A REQUIREMENT FOR PARTICIPATION Louisiana Economic Development (LED) is responsible for certification of businesses. Certification is available on-line at Business must be independently owned and operated; owners domiciled in Louisiana; officers must be citizens or legal residents of the United States; principal business office must be in Louisiana Business must have less than fifty (50) full-time employees Business average annual gross receipts are not to exceed $10 million for construction, and $5 million for non-construction for each of the previous three tax years Businesses seeking certification under the Veteran Initiatives may also be required to provide appropriate documentation from the United States Department of Veterans Affairs or the Louisiana Department of Veteran Affairs

58 Once the vendor has completed the registration process and obtained the Small Entrepreneur designation for the Hudson or Veteran Initiatives Program, they can be identified through the search criteria in LAPAC SEBD certifications interface from LED to LAPAC twice a week on Mondays and Fridays Agencies and Procurement personnel can identify certified small entrepreneurs through the search criteria in LaPac network database

62 OSP S WEBSITE Contacts (OSP staff, other agencies, etc.) OSP Memos Guidelines, procedures Information for Emergency procurement Contract information (search thru LA ecat) Legal info & search capability On-line forms Reference materials Vendor information Travel Info

68 OSP HELP DESK Phone Number: s (preferred): Purchasing: Professional Contracts: Vendor Inquiries:

69 QUESTIONS?

9.1 AUTHORITY TO MAKE EXCEPTIONS TO THE REQUIREMENT FOR COMPETITION

220-RICR-30-00-9 TITLE 220 - DEPARTMENT OF ADMINISTRATION CHAPTER 30 - PURCHASES SUBCHAPTER 00 - N/A PART 9 - EXCEPTIONS TO COMPETITIVE BIDDING REQUIREMENTS 9.1 AUTHORITY TO MAKE EXCEPTIONS TO THE REQUIREMENT