Purchasing 101 Introduction to the Community College Purchasing Processes Sonja Blinka, Director of College of the Mainland Purchasing sblinka@com.edu 409-933-8474
How To Spend the Money
The Governmental Requirements The Law Texas Education Code 44.031 through 44.047 Purchasing Contracts 44.031 All purchases made over $50,000 must follow one of the defined purchasing methods What criteria can be used to determine an award ( Best Value ) Public advertisement in a local newspaper Definition of and procedure for making an emergency purchase Criminal Penalties 44.032 Construction Services Government Code, Chapter 2269
Policies & Procedures College Policy CF (Legal) Based directly on governing statutes CF (Local) Purchasing Acquisition Purchasing Authority Competitive Procurement Requirements Interlocal Agreements Vendor s List Bids and Proposals under $50,000 Information Technology and Construction Purchases Employee Conflict of Interest
The College Requirements Purchasing Resource Manual Purchasing Requirements Purchasing Organization How to make a College Purchase Sole Source Procurements Personal, Consulting and Professional Services Purchase Requisition Preparation Purchase Order Receiving Purchasing with a Purchasing Card
The College Requirements (cont.) Purchasing Resource Manual Vendor Selection Purchasing Ethics Purchasing Contracts Available at: http://www.your_college_website.edu
Purchasing Ethics Responsibility to the tax payer to use the College funds appropriately Develop good relationships with suppliers and encouraging competition while avoiding an appearance of favoritism or misconduct Employees are not to circumvent laws, policies, and procedures, or make liberal interpretations Not make intentional sequential or component purchases to circumvent requirements Failure to follow State laws and College policy will render the purchase non-compliant
Purchasing Ethics (cont.) Receipt of gifts, kickbacks or gratuities are not acceptable and may lead to disciplinary actions if necessary Opened acknowledgement of conflicts of interest Failure to follow requirements may have criminal penalties
The Organization What your organization might look like
Where Do You Fit In College-wide Perspective Board of Trustees President VP of Instruction Internal Auditor VP of Fiscal Affairs Purchasing Department
Are You A Big Fish In A Large Pond or A Big Fish In A Small Pond Director of Business / Budget Services Director of Purchasing Assistant Director of Purchasing Assistant Director of Purchasing Programs Manager - Distribution Text Book Coordinator Manager Print Services -Purchasing Process (Buyers, Purchasing Specialist) -Purchasing Programs (Pcard Administration, Travel, Fixed Assets, Surplus Property) -Mail Services -Warehouse -Distribution -Text Books -Instructional Media -Records Retention -Print Services -Convenience Copiers -Media Lab
Authority and Aggregation Centralized or Decentralized Buying Authority The Purchasing Office is tasked with overseeing all purchasing activity in a College Sometimes authority for Purchasing is delegated to the individual campuses and departments The College is recognized as a whole, not as individual entities The annual expenditure will determine which purchasing method is to be used
Aggregate Purchasing The total sum of similar purchases President Instruction Institutional Advancement Fiscal Affairs Student Services Example: If each department purchases 10 of the same book that cost $50.00 per book, the College as a whole has spent $2,500.00
Contracts, Agreements and Funds Contracts / Agreements can only be signed by the President or designee as stated in Policy Signature from any other non-delegated College employee will render the agreement void By signing an agreement on behalf of the College may create on obligation on the individual to pay Funding Requirements: General Fund All Activity Funds Federal Funds (must be more restrictive than federal guidelines)
Purchasing Flow From start to finish and what to do
Purchasing Process Flow What to buy Specifications/Scope of Work Where to buy On College Contract, Inter-local Agreement, New Bid, or Sole Source Who does the buy Delegated authority When do you need it
Establish Resources No bidding necessary
College Contracts Overview The Purchasing Office administers most all contracts Both goods and services contracted Majority are term contracts with multiple option periods The end user coordinates their needs with the Purchasing department to determine the contract price
Inter-local Contracts Overview All interlocal contracts and purchases are handled through the College Purchasing Office Purchasing Office will determine if the interlocal will be in the best interest of the College An attempt should be made to get best pricing available
Sole Source Overview Defined by TEC 44.031(d), College Policies CF(Legal) For a product or service to be considered sole source, it must be available from only one source, and meet one of the following descriptions: an item for which competition is precluded due to the existence of a patent, copyright, secret process, or monopoly a film, manuscript, or book a utility service, including electricity, gas, or water, or a captive replacement part or component for equipment Only goods/services that meet the definition are acceptable Notarized Sole Source Affidavit or Letter of Notification from Vendor
Purchases under $5,000 Overview Normally includes spot or one time purchase items Procedure No attempt at competition is required The end user is always encouraged to seek competitive quotes regardless of dollar value
Purchases Over $5,000 - $49,999 Overview For larger, one time purchases Procedure The end user is encouraged to secure competition through quotes from a minimum of three (3) vendors, preferably current vendors If quotes are secured, all documentation concerning choice of vendor is to be retained in the Purchasing Office with the Purchase Order or Contract
Purchases Over $50,000 Overview Larger purchases that may include a single purchase or numerous purchases over time Limited Term Contracts Procedure A minimum of 3 suppliers must be contacted additional may be added if necessary All proposal documents (e.g. quotes, supporting spec sheets, etc.) concerning award to be retained by for the Contract file Assigned a specific Contract Number Board of Trustees Approval depends on CF Local
Formal Solicitation Thresholds Sealed Competition necessary
Purchases Over $50,000 (contd) Overview Includes term contracts, large one time delivery, highly complex purchases, construction contracts, etc. Requires competitive sealed bid / proposal process Use of best value required Average 60 to 90 days (longer for complex procurements) Procedure Campus / Department determines need and provides required information (specifications, scope, quantity, etc.) Purchasing Office to release, open and award
Purchasing Methods The Choices of Solicitations
Purchasing Methods Request for Quotes RFQ Can be used as an informal process Informal process does not require sealed bids Request for Bids RFB Restricted to the Purchasing Office only Formal solicitation process (sealed bids) Request for Proposals RFP Restricted to the Purchasing Office only Usually an elaborate eval. process with use of scoring criteria Allows for negotiations as to final terms, pricing, etc.
Purchasing Methods (cont.) Request for Competitive Sealed Proposals RFCSP Restricted to the Purchasing Office only Usually an elaborate eval process with use of scoring criteria Allows for negotiations as to final terms, pricing, etc. Request for Qualifications RFQ Restricted to the Purchasing Office only Used for professional services only Request for Information RFI No associated process since no purchase is made Used for investigation or research Helps in the development of specs or requirements
Formal Solicitation Flow A partnership with the End User and Purchasing
Competitive Bidding Process - Formal Solicitation Development Approx. 60-90 days Purchasing Process Contract Period Need is Determined Develop Supplier List Develop Specifications Determine Award Criteria Solicitation Document Finalized Release of the Solicitation Publish in Local Newspaper Pre-bid Conference if needed Opening / Closing Evaluation Process Award of Contract Contract Begins Contract Ends Restart process if needed
Specifications / Statement of Work The backbone of the solicitation
Writing a Specification / Scope of Service Specifications for Goods Rely on the experts good chance it s not Purchasing Rely on available resources do research Be specific in what it is you need, not necessarily what you want minimum requirements are the best place to start Be cognizant of competition don t be exclusive Write specs so that you can verify what you received is what you need Specs left out of a solicitation cannot be used as a disqualifier for others Don t over / under do the spec
Writing a Specification / Scope of Service Services All solicitations that include a service need to have some level of scope of work included in the specifications A scope is normally a performance based procedure The scope develops the focus of the objective and should include all necessary points of work to be performed If the scope does not include a specific step, you may not be able to require the vendor to perform the step If a schedule or certain limitations to access of the area to be worked in, the solicitation needs to address these thoroughly If the scope is large in scale, it may require performance based measures
College Contracts Established Resources
Contracts Active Contracts Listing A list of all the current contracts maintained by the Purchasing Office can be found at: http://www.com.edu/purchasing Once an item or service is under contract with a specific vendor, the College is to use the contracted vendor unless special circumstances prevent it Only the items or services awarded to a particular supplier can be purchased through that contract Line Item Awards This describes a contract that was awarded on a line by line basis with a set price to a specific vendor
Contracts (cont.) Catalog Contracts This describes a contract that may include multiple awarded vendors Vendor may provide a discount for purchases from a published catalog Usually will include all items within the vendor s catalog with some exceptions Prices subject to be changed based on changes / updates in the catalog
Vendor Relations Developing the Partnership
Vendor Relations Communications End User Buyer Vendor Solicitations Major Contract Issues
Vendor Relations The College is in a partnership with the vendor community and both should perform their duties with professionalism and integrity and should maintain and perform based on any contractual agreement between both parties All performance related issues good or bad - should be documented for future reference Vendors deserve a right to know how they are doing - convey performance kudos or issues they arise and communicate
Purchase Requisitions The submission of a purchase requisition is not the start of the purchasing process, but the completion of it it should not be created after the item or service has been received Quote / Contract Number must be included in Comment Line Documentation to support quotes over $5,000 must be provided to the Purchasing Office before req can be approved Reqs must be submitted by deadlines indicated in the Purchasing Manual or end of year close out to be considered
Follow-up to Purchase Finishing off the Process
Receiving Purchased Items Always notate on the shipping receipt if any external damage is found on the outside of the container Verify that what was called for in the purchase order is what was received Check specifications within the PO / contract to ensure what was received meets the requirements Notify the supplier immediately if any damage is found Review the invoice for contract price, discounts if applicable, freight if allowed, etc., before sign off
Receiving when Services are being performed Be familiar with what the scope of service requires the vendor to perform Verify that all aspects of the scope are performed before signing off on the work When an invoice is received, review all aspects (contract price, discounts if applicable, freight if allowed, etc.) before sign off Update software or paperwork upon completion of the order for payment processing
Questions?