Procurement 101. Tom Blaine, CPPO, FCPM, FCPA Contract Administration Manager, City of Miramar, FL NASPO Life Member
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1 Procurement 101 Monica Wilkes, CPPO, CPPB Public Procurement Consultant NASPO Honorary Member Universal Public Procurement Certification Council (UPPCC) Governing Board Tom Blaine, CPPO, FCPM, FCPA Contract Administration Manager, City of Miramar, FL NASPO Life Member
2 Goals Present general policies, rules, regulations, and state statutes Learn to navigate the governmental maze Better understand the procurement language Provide tips and learning tools to be successful bidders and contractors
3 Public Procurement Equal Competitive Opportunities Fair and Open Competition Transparent Ethical, efficient, and effective public procurement Guards against favoritism, improvidence (not providing for the future) and extravagance, fraud and corruption Strict laws to protect taxpayers Social responsibility programs
4 Contracts Centralized contracts generally statewide contracts Agency contracts delegations granted to agencies to purchase with same procedures as Central Purchasing Discretionary purchases under a certain dollar threshold (authorized by law) without the need for formal competition (for M/WBE, small business, recycled). NYS definition aggregates purchases over 12 months and requires public notification if greater than $ value Sole source item is unique and possesses specific characteristics that can be filled by only one source Single source products or services available from two or more sources of supply but agency chooses a single source based on the best interests of the state. (e.g. equipment maintenance required from a certain vendor to maintain the warranty)
5 Contracts Piggyback contracts One or more organizations bid their requirements and the bid includes language that allows the others to participate in the contract. Cooperative contracts Two or more governmental entities jointly combine requirements and solicit bids. Commonly used by federal, state, county, or local government entities. Emergency contracts used in an urgent and unexpected situation where health and public safety or the conservation of public resources is at risk. Note: Other agencies may have authority to perform centralized procurement functions (e.g. construction or technology contracts).
6 Sole and Single Source Purchases Require Strong Justification Is product or service unique, one of a kind? Can program requirements be modified so that competitive products or services can be used? Is product available from only one source, not through wholesalers, jobbers or retailers? Must items be interchangeable or compatible with substantial existing inventory?
7 Cooperative Agreement Benefits Aggregate Volume Reduces administrative expenses Reduces advertisement (solicitation) & development acquisition time Increased competition Reduces product cost Saves taxpayer dollars
8 Set Aside/Preference Programs Statutory Authority for socio economic preferences: Correctional Facilities Blind, Disabled Workshops Certified or non certified Minority or Women Owned Business Enterprises (M/WBE) Small Businesses Veteran Businesses Instate (local) Preference (Be aware of reciprocal legislation)
9 Solicitations Request for Quotation (RFQ) Invitation for Bid (IFB) or (ITB) Request for Proposal (RFP) Request for Information (RFI) to survey the market Multi Step Competitive Sealed Bid, definite specs, low dollar
10 IFB vs. RFP Invitation for Bid (IFB or ITB): Used in the procurement of commodities and awarded to the responsive and responsible bidder on the basis of lowest price. Request for Proposals (RFP): Used for procurements when factors in addition to cost are weighed. The contract is awarded to the responsive and responsible proposer offering the best value.
11 Contract Use Extension May include: State authorities and public benefit corporations; Local governments and municipalities; Public and private elementary and secondary schools, universities and colleges; Volunteer ambulance and fire companies; Libraries; cemeteries and Other authorized users.
12 Commodities and Services Commodities Technology Services Telecommunications Construction Consulting Services Professional Services
13 Price Firm Fixed Price Percentage Discount with or without price adjustments due to changing price lists Percentage Upcharge (cost plus) Firm Price with pre established price adjustments (up or down) based on changing indexes or price lists (e.g. NYMEX NY Mercantile Exchange energy) Labor and materials (construction or services)
14 Contract Types Term Contracts source of supply for the goods and/or services over a specified period of time. Usually one or more years Multi year contracts with yearly extension options Estimated purchases no purchase guarantees IDIQ Indefinite delivery indefinite quantity Estimated Indefinite quantity for a definite period based on prior history, surveys, vendor reports Requirements Contracts agency specific requirements Definite quantity for a definite period (i.e. fuels)
15 Agency Specific Contracts For individual agencies with specific needs that may not be applicable to other state agencies. Golf Equip (Parks Department) Uniforms (Correction) Guard Rails (DOT) Advertising/Marketing (Lottery)
16 Method of Award Single Award awarded to one contractor Multiple Award awarded to more than one contractors Award based on geographic locations within the state and/or by region By Lot based on a group of line items
17 Other Contract Types Strategic Sourcing Reverse Auctions Cross organization Projects across several organizations E procurement Strategies Piggyback Contracts GSA Contracts ability to purchase from GSA (may require statutory authority)
18 Public Bid Advertisements Generally required by law Newspapers State publications Online notifications Social media Paid or free systems
19 Procurement Funding Models Appropriation in state budget Self funding administrative fees that range between.5% to 2% (commonly 1%) and added to contract prices to support procurement programs Combination of both
20 Contract Participation Subcontractors, authorized resellers, dealers, distributors, or agents Small, minority, or women owned business enterprises (S/M/WBE) Opportunities available through manufacturer or contractor Sales through subcontractor, authorized reseller, dealer, distributor, or agent must be in compliance with contract terms and conditions and approved commodities and services
21 Responsive Bidder Definition A bidder whose bid meets or exceeds: Administrative requirements Technical specifications Required terms and conditions Required signatures Bonding and/or insurance and license requirements Delivery time Product testing certifications Samples Reports
22 Responsible Bidder Vendor responsibility Financial and organizational capacity Legal authority to do business with the state Integrity of the owners/officers/principals/ members and contract managers Past performance of the bidder on prior government contracts (Acronym FLIP)
23 Successful Bidders Read entire bid/proposal Request written clarification prior to bid opening. Review submittal for accuracy and completeness including signed bid with all mandatory forms Submit timely bid Price bid competitively Be aware of procurement lobbying restrictions Be responsive and responsible (deviations may disqualify bidder) Attend pre bid and/or post award conferences
24 Key Words Must, shall, will mandatory requirements Should, could, may recommended conditions
25 Evaluations Seek clarifications prior to bid opening Don t assume Avoid bid or award protests by fully understanding requirements Understand must versus should requirements Use Freedom of Information (FOI or FOIA)as permissible by law If unsuccessful, request a debriefing where permissible
26 Debriefing A debriefing details the shortcomings of a bid submission Unsuccessful businesses should always request a debriefing During a debriefing, take notes and ask questions for future improvement opportunities Review winning competitor s bid or proposal (where possible) and understand its strengths
27 Marketing BE PROACTIVE AND INFORMED Know your buyer and users review state budget Understand procurement laws and policies that govern the procurement Market your firm s qualifications and those of your subcontractors especially small, minority or woman owned business Market your contract, including green products Be active and participate in user groups and trade shows
28 Technical Assistance Free technical assistance Procurement Technical Assistance Centers (PTACs), funded by the US Department of Defense and state and local entities Centers help businesses seeking to compete successfully in federal, state and local government contracting us.org/new/
29 RESOURCES State website laws, policies, procedures, requirements NASPO White Papers and Issue Briefs ( Survey of State Government Procurement Practices State and Local Government Procurement: A Practical Guide a comprehensive guide for public procurement Green Purchasing Guide and many otherpublications NIGP National Institute of Government Purchasing Online Dictionary of Procurement Terms c fef b86d 7f8de1e45542
30 Successful Strategies COMMUNICATE with state agency and buyer BE PREPARED do your homework Review expiring contracts and budgets Don t assume, clarify Register with state review state information and website Remember the blank CD GOOD LUCK ON SUCCESSFUL CONTRACTING!
31 State Procurement 101 A VIEW FROM THE INSIDE Tom Blaine, CPPO, FCPM, FCPA Contract Administration Manager, City of Miramar, FL
32 -Dennis Wholey
33 FINISHED FILES ARE THE RE- SULT OF YEARS OF SCIENTIF- IC STUDY COMBINED WITH THE EXPERIENCE OF MANY YEARS
34 How many F s are in the sentence?
35 FINISHED FILES ARE THE RE- SULT OF YEARS OF SCIENTIF- IC STUDY COMBINED WITH THE EXPERIENCE OF MANY YEARS
36 Your Experiences As a business what has been your experience in dealing with the government procurement process?
37 It s not your fault! Not all the rules of the game are written down.
38 Private vs. Public Sector Purchasing Similarities and Differences Private Sector Purchasing Cost Evaluation Strategic Partnerships, long term relationships Small group of Vendors Select Business Partners via closed process Can do anything that is not illegal Accountable to Management
39 Private vs. Public Sector Purchasing Similarities and Differences Public Sector Purchasing Price Evaluation Vendors are adversaries Arms length relationship Large group of Potential Bidders Most of the process is in the public Competition is the preferred method of purchase Can only do what the rules/laws allowed
40 Current Trends in Public Procurement Green Purchasing Green Building Standards and Remodeling Energy Saving Products Recycled/Recyclable Products Find a product or service the government wants that the large companies are not selling Spend Analysis Strategic Partnerships
41 Perspective of the Players Requisitioner / Specifier Wants something that works Doesn t want a hassle Prefers long working relationships with suppliers If a product or service works well, wants to keep it
42 Perspective of the Players Departmental Managers Don t want the rules broken Don t want productivity of department affected
43 Perspective of the Players Procurement Staff Multiple stakeholders administration, elected officials, citizens, news media, vendor community Disinterested third party Don t care who gets the award Perspective depends on the type of the organization Clerical, Bureaucratic, Professional
44 Perspective of the Players Clerical Typically are clerks, push the paper May issue the bid, send results to department for decision Processes the PO after the decisions are made by the department May be organized to look like one of the other types, but no decision authority
45 Perspective of the Players Bureaucratic Bureaucratic and Professional Purchasing organizations may be hard to distinguish Impediment to introducing and maintaining efficient government Tends to focus on control processes Know all the rules, regulations and laws pertaining to procurement Process over results Concerned with transparency
46 Perspective of the Players Bureaucratic Typically makes award decision A majority of the organizations have certified staff and managers Majority of purchasing organizations
47 Perspective of the Players Professional Highly educated multi disciplinary staff Concerned with adding and documenting value to the government Significant scrutiny over specifications Focus on knowledge and information Conducts market research Documents vendor performance Eliminates poor performing vendors Concerned with transparency and value May over exhibit professionalism
48 Perspective of the Players Elected and Appointed Officials Don t want scandals May become overactive in the procurement process to assist a constituent Prefer to keep the purchases local Do not have significant knowledge of process and my be influenced by lobbying form those they trust
49
50 Who is the decision maker? Centralized vs. decentralized Centralized Procurement makes /recommends the important decisions Decentralized Departments make the important decisions Need to determine who makes what decisions Need to do some research
51 Finding Business Opportunities On Line Registration
52 Federal Vendor Registration
53 Bid Aggregation Sites Web site that searches government bid posting sites and aggregates all those to one location. Reduces the time needed to search for bidding opportunities Most are a paid subscription Some are free for basic services
54 Bid Aggregation Sites
55 Free Bid Aggregation Site
56
57 Questions?
Procurement 101. Tom Blaine Senior Research Associate, Public Procurement Research Center NASPO Honorary Member CPPO, FCPM, FCPA
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