Utah Valley UniversityNew Age Procurement

Some Positive Changes have been made.

Why?

Why code was updated◦ Procurement code was old◦ Various high-profile procurement-related issues

Update process◦ 2012 Legislative Session◦ 2013 Legislative Session◦ 2014 Legislative Session

Effective Date: May 1, 2013

Update to State Code

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Procurement code declares Board of Regents as Rulemaking Authority

New Regent’s policy delegates this rulemaking authority to each institution

Regent’s Policy

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Currently in Stage 3 Posted on the Policy website New policies

◦ 241, University Procurement◦ 242, Solicitation and Award of Procurement

Contracts◦ 243, Small Purchases◦ 244, Requisitions and Purchase Orders◦ 245, Receiving Goods and Services◦ 246, Surplus Property

New UVU Policies

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Other affected policies◦ 204, Appropriateness of Expenditures

Updating references to procurement policies Updating format Fixing some minor grammatical and syntax errors Not changing expenditure procedures

◦ 421, Property and Equipment Removing Surplus section only Not updating format

New UVU Policies – cont.

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High Profile Procurement Issues

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Split Purchases Unethical behavior

◦ Accepting Gratuities Inflating contracts Bid Rigging

DABC

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Under the Utah Procurement Code, it is illegal to divide, split, parcel, or manipulate a procurement, with the intent of making a larger purchase appear to qualify as a small-dollar purchase or to avoid an established dollar threshold.

Revocation of privileges (P-card, LPC) Disciplinary action Report to AG

Splitting procurements

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All individuals participating in a procurement, including contract administration, must adhere to the ethical requirements outlined in the Utah Procurement Code◦ Gratuities◦ Kickbacks◦ Fairness◦ Impropriety

Ethical Requirements

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Know and obey the letter and spirit of laws, regulations, and policies

Prevent the appearance of unethical behavior

Protect confidential information Avoid conflicts of interest Do not accept gifts, gratuities, or kickbacks

from vendors which may appear to influence purchasing decisions.

UVU Procurement Code of Ethics

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Requisitions should have a good estimated amount◦ No $1.00 requisitions

Change Orders submitted through website form

Additional items will not be added from invoice

Analyzed to ensure compliance with policies, procedures, and applicable contracts

Change Orders

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During a procurement process, no communication with vendors

Vendors must be directed to Purchasing

Communication

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Mishandling money Lax control environment Personal Reimbursements

“Intentional and willful disregard by certain employees for compliance with appropriate practices and policies.”

Timpview High School

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“Any expenditure external to UVU that cannot be purchased with a limited purchase check or purchasing card must be obtained using a requisition through the Purchasing Department” (Policy 204.V.A.1.g).

Sales Tax. Lack of proper controls.

Check Requests – A/P

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Should only be used if the expenditure cannot be feasibly made using an LPC, P-Card, or PO as determined by FaBS and PS.

Include a detailed explanation on the check request.

Check Requests received for reimbursement may be sent to the VP as a violation.◦ See Policy 204.

Questions regarding Check Requests are referred to Scott Wood.

Check Requests – Proper Use

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Protest on I-15 CORE Project◦ Criteria weighting was changed to favor a vendor◦ Evaluation factors included in the RFP were not

adhered to

Settlement: $13 million

UDOT

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Specifications shall not be unduly restrictive or appear to favor one vendor over another

Rating criteria should be clear and concise Rules can’t be changed during the process Analysis on expenditures to ensure fairness

Vendor Favoritism

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Emergency! Emergency!

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Emergency procurements are procurements needed due to an emergency situation◦ Threat to public health or welfare◦ Serious threat to the functioning of the institution◦ Procurements made at Purchasing’s discretion

Urgent procurements are procurements that are needed due to a lack of planning or circumstances beyond the control of the requestor.◦ All procurement policies and procedures must still

be followed.

Emergency vs. Urgent

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Violations

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An unauthorized purchase is a purchase made without following the authorized procurement processes. 

An after-the-fact purchase occurs when a University employee places an order without first completing a requisition and receiving a purchase order.

Violations

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Result in duplicate payments to the vendor, for which the department is responsible.

Result in higher costs for goods and services Lead to significant vendor payment issues that

can result in problems for other departments on campus.

Bypass the appropriate approval process. Place the University at financial risk and create

potential personal liability. Create additional, often unnecessary, work for

administrative support staff.

Violations – cont.

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Ways to Avoid Violations: If you have to place an order, create the

requisition right away.  Work with the Purchasing Office if you need the order expedited.

You must arrange a payment method BEFORE placing an order.  “I didn’t know…,” is not a valid excuse for violating policy.

Violations – cont.

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What to do if a violation occurs: If a violation occurs, fill out all sections of

the Purchase Violation Form.  ◦ An explanation of why policy was not followed ◦ Future corrective action

Attach invoice and send for authorizing signatures

Vendor is paid DO NOT enter a requisition.

Violations – cont.

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What changed?

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Thresholds

Old New

Bid Limit◦ $3,000◦ $5,000 (Construction)

Advertised Limit◦ $30,000◦ $50,000 (Construction)

Small-Dollar Purchase Threshold◦ $5,000◦ $15,000 (Construction)

Large-Dollar Purchase Threshold◦ $50,000

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Small-Dollar Purchasing

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Methods:◦ Purchasing Card (P-Card)

Must comply with P-Card usage guidelines Default Limit: $1,000 per purchase

◦ Limited Purchase Check (LPC) Must comply with LPC usage guidelines Limits: $150 and $500

◦ Requisition/Purchase Order Process

Small-Dollar Purchasing

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Default limit: $1,000 Auditing process

◦ New preliminary audit report◦ Clearer deadlines◦ Adjustment to the point system

P-Card Changes

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Ordered using a Stores Requisition◦ Do not mix with regular stores items

Return documentation within five business days

Don’t return unused checks via intra-campus mail

Fewer violations

LPCs

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Requisitions (Req) are not Purchase Orders (PO)◦ Orders cannot be placed with requisitions

PO must be completed and approved before orders are placed

Orders placed before a PO is completed and approved are violations

Requisitions

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Must include all necessary information for purchasing and vendors to understand what is being procured◦ Minimum specifications◦ Product numbers and descriptions◦ Names of individuals and Dates

Memberships, conferences, hotels, presenters, performers

Requisitions

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Reqs over the small-dollar purchase threshold

Performed by the Purchasing Office Quotes gathered from at least two known

vendors Order placed with vendor providing the

lowest price Not required if items are available through a

contract

Request for Quotes (RFQ)

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Large-Dollar Purchasing

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Requisition/Purchase Order Invitation for Bid Process Enhanced Procurement Methods

Large-Dollar Purchase Methods

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Publically advertised through BidSync.com◦ Time frame set by buyer

Minimum ten calendar days Minimum specifications listed in requisition

◦ Not brand specific◦ Not unduly restrictive

Awarded to vendor providing lowest price

Invitation for Bids (IFB)

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Enhanced Procurement

Methods

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Multi-Stage Bid (MSB) Request for Proposals (RFP) Multi-Year Pricing Agreement/Contract

Requires justification◦ Fill out Justification for Enhanced Procurement

Method

Enhanced Procurement Methods

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MSB - New

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Equipment needed to perform specific experiment

Specialized software needed to perform specific function

Specialized services

MSB Examples

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An MSB is used when potential bidders or potential products must be pre-qualified before requesting priced bids. Objective criteria (pass/fail, quantitative) is used to determine if a potential bidder or potential product meets the minimum qualifications or specifications needed.

Multi-Stage Bids (MSB) - New

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Enter a requisition.◦ Indicate MSB in the comments field

Fill out the Justification for Enhanced Procurement Method

If approved, buyer will provide an MSB Statement of Needs and Rating Criteria document

Work with the buyer to complete the document

MSB Process

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Bids performed in two stages◦ Stage 1: Technical/Qualification

Allows vendors to submit technical (no cost) written bids outlining capabilities and qualifications.

May include demonstrations, presentations, trials, etc.

Bids are rated pass/fail based on meeting qualifications and specifications

◦ Stage 2: Cost bids Cost bids are requested from vendors that

successfully pass Stage 1 Awarded to vendor providing lowest price in

Stage 2

MSB Process – cont.

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Technical bids are evaluated by at least three individuals◦ Acceptable, Potentially Acceptable, Unacceptable

Discussions with vendors to clarify technical bids may be held during the evaluation process

Minimum timeframe: Two weeks – Stage 1◦ Timeframe set by buyer

MSB Process – cont.

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RFP - Improved

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In an RFP process, vendors are asked to submit proposals outlining how they would meet or exceed our needs. A committee evaluates the proposals and rates each proposal based on the criteria contained in the RFP. Following the technical evaluation, a cost evaluation is performed. The award is made to the vendor that will provide the best value to the University.

Request for Proposals (RFP)

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Enter a requisition.◦ Indicate RFP in the comments field

Fill out the Justification for Enhanced Procurement Method

If approved, buyer will provide an RFP Statement of Needs and Rating Criteria document

Work with the buyer to complete the document

Timeframe: Four to six weeks◦ Timeframe set by buyer

RFP Process

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Evaluation is a three stage process◦ Stage 1: Technical Evaluation

Proposals are evaluated subjectively by at least three individuals

Each weighted criterion receives a score 1-5 Technical points are combined for each proposal Committee cannot have access to cost information

RFP Process – cont.

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Stage 2: Cost Evaluation◦ The buyer calculates the cost score based on the

formula 40 x (2 – Proposed Price / Lowest Proposed Price)

◦ The buyer may work with the committee to clarify proposed costs

RFP Process – cont.

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Stage 3 – Composite Score◦ The technical and cost scores are combined to

form the composite score Cost is approx. 30% of total composite score

◦ The contract is awarded to the vendor whose proposal receives the highest composite score May require a cost-benefit analysis

RFP Process – cont.

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Request for Information

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The purpose of an RFI is to obtain information, comments, or suggestions from potential bidders before issuing a solicitation. It can also be used to determine whether a solicitation should be issued or to generate interest in a future solicitation. RFIs are not considered a procurement process, but an information gathering process.

Request for Information (RFI)

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Pricing Agreements/Contract

s

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Bid or RFP Completed by the State or WSCA No additional competition needed Purchase directly

State Contracts

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Department◦ Elevator Maintenance◦ Uniforms

Campus-wide◦ Buses

University Contracts

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Special Purchasing Processes

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Computers◦ Computer Shop

Printers◦ HP

Audio/Visual Equipment◦ Contact Media Services

Furniture

Campus Standards

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Software, including apps◦ Software Ordering System

Campus-owned cellphones/aircards Office Supplies

Unique Ordering Requirements

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Prepayments

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Not allowed Exceptions determined by Purchasing

◦ Deposits◦ Progress Payments

Prepayments

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Purchasing Flowchart

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FlowchartThis is how it works regardless of:

Fund sourceSourcing method

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Exceptions

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Sole source procurement may be used when a requirement is only reasonably available from a single supplier◦ Availability◦ Compatibility◦ Transition costs

Require justification◦ New Sole Source Justification Form

Not reasons: price, time

Sole Source Procurement

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Services performed by individuals.◦ No product◦ No companies

Requires Responsible Party signature. Second Level approval required for

payments $1000 or more.

Independent Contractors – A/P

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Deemed “Independent” by FaBS and Human Resources.

Guest Speakers/Performers are always considered independent.

Form can be downloaded from the Finance and Business Services Website.◦ http://uvu.edu/finance/reports-forms-files/

Independent Contractors

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Personal reimbursement program No P-Card or LPC Travel Office

Travel

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New Website

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Procurement Services

Here to Serve You

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