SPECIAL METHODS OF PROCUREMENT

LaNIGP

STATE OF LOUISIANA OFFICE OF STATE PROCUREMENT

AGENDA

SOLE SOURCE PROPRIETARY BID

AUTHORIZED DEALER

USED EQUIPMENT

EMERGENCY PURCHASE

SMALL PURCHASE EXECUTIVE ORDER

QUESTIONS

Sole Source purchase means that there is one product with one supplier – no distributors (ANYWHERE IN THE WORLD). Sole source purchases are not bid.

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 Examples:

Accessories for equipment is that is already in use; if manufacturer does not sell through distributors, to avoid warranty being voided

Procurement of Public Utility ServicesPatented or copyrighted materials, that are only available from the patent or

copyright holderNew technology equipment that is not available from any source other than

the manufacturer

SOLE SOURCE

SOLE SOURCE When  your agency requests a Sole Source purchase they must submit the following:

• Letter from the Agency Head or designee, addressed to the Director of State Procurement, justifying why only the listed product will meet the agency’s needs.

• Firm, fixed price quote from the vendor/manufacturer.

• Letter on company letterhead from the vendor/manufacturer indicating the unique feature(s) of the product, and stating that they are the sole source – they do not sell through distributors.  

• A Published Price List or a Signed & Notarized typed listing of prices.

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NOTE: Vendor “sales territories” are not recognized for procurement purposes in determining sole source. Having distributors in other countries also means an item is not sole source.

Sole Source blanket orders cannot be renewed. Each year, you must furnish a new letter from the agency and vendor, to determine if the justifications are still valid. Sometimes what was once a sole source can now be obtained through multiple suppliers.

Your agency must submit an annual report to OSP with all agency sole source procurements from the previous year. These are then reported to the legislature.

Definition: A Proprietary Specification is one that cites a brand name, model number, or some other designation that identifies a specific product to be purchased, exclusive of any others.

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 its product through more than one distributor.

Proprietary purchase means: there is One Brand, One Supplier/Manufacturer, BUT more than one Distributor

Proprietary purchases must be bid. Since use of a proprietary specification is restrictive, when your agency requests a

Proprietary purchase they must submit the following:

Written justification as to why the purchase must be restricted to one manufacturer / brand / model. This should be on agency letterhead, and can be attached to your shopping cart, in Proact, or sent by email. The buyer working the file will route the justification up for approval.

PROPRIETARY BID

Once approved, a proprietary bid must contain language in the solicitation, designating it as proprietary, such as:

“This Solicitation has been approved as a proprietary purchase and only bidders meeting these exact specifications/brands will be considered for an award.”

Common Proprietary Examples:

Employee uniform clothing not covered by a contract. Equipment replacement parts for stock. Furniture to match existing inventory. Accessories/expansions for existing equipment, for compatibility.

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AUTHORIZED DEALERAuthorized Dealers for Equipment Repairs and Parts:

“Authorized Dealer” is defined as a company that is authorized by the OEM(Original Equipment Manufacturer) to sell and/or provide service for its products.

“Louisiana authorized dealer” is a company that satisfies the requirements of a resident business as defined in La. R.S. 39:1556(47) and is authorized by the OEM to sell and/or provide service for its products.

Small Purchase Executive Order JBE 16‐39 5:A.1‐4 states:

No competitive bidding is required unless otherwise stated for the following items:

1. Repair parts for equipment obtained from an authorized dealer. A Louisiana authorized dealer shall be used if available.  This provision does not apply to the stocking of parts

2. Equipment repairs obtained from an authorized dealer.  A Louisiana authorized dealer shall be used if available

3. Vehicle repairs not covered by a competitive state contract or the state fleet maintenance repair contract, obtained from an authorized dealer. A Louisiana authorized dealer shall be used if available

4. Vehicle body repairs covered by insurance recovery and in accordance with insurance requirements

AUTHORIZED DEALER

Authorized Dealer Certification forms may be found on the Office of State Procurement’s website under:  

Purchasing / Online Forms / Agency Forms

AUTHORIZED DEALERWritten verification on OSP’s Authorized Dealer Certification Form, along with the vendor’s 

quote, should be included with all transactions, and should be a part of the agency's backup file, to support any claim of an Authorized Dealer qualification.

Competitive bidding is required for repairs and repair parts in excess of $5,000 when notusing an OEM or an Authorized Dealer.

Parts purchased for stock that exceed $5,000 must be competitively bid. New equipment cannot be purchased from an authorized dealer without bids.  Regular maintenance on equipment must be bid – it cannot be procured as an authorized 

dealer service.

Scenario Examples: o If you are buying a new fan for a Trane HVAC unit, and you purchase it from a 

Trane dealer, that is an authorized dealer part.  o If your Trane HVAC unit breaks down and needs repairs from a serviceman, that is an 

authorized dealer repair.o If your Trane HVAC unit needs quarterly maintenance inspections, that should be bid as 

an annual blanket order contract if it exceeds $5,000.o If your Trane HVAC unit breaks down completely and needs replacement, it has to be bid 

competitively if over $5,000, with “or equal” in the specs, unless you can justify proprietary brand name specs.

USED EQUIPMENT

An Agency may procure any equipment which is used, if the procurement officer can determine the purchase to be cost effective to the state.

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.

The purchase of Used Equipment falls under “Conditions for the Use of Sole Source Procurement” as defined in Procurement Rules and Regulations: Title 34, Chapter 9; Section 905 (B) and R.S 39:1600.

USED EQUIPMENT

Prior to the purchase of any used or demonstrator equipment, the agency must obtain approval from the Director of the

Office of State Procurement (regardless of cost). The head of the agency must certify in writing to the Director all of the following:

• The price for which the used equipment may be obtained• The plan for maintenance & repair of the equipment, and the

estimated cost for such maintenance• The savings that will accrue to the state because of the purchase of

this used equipment.• The fact that following the bid procedures set out in the Procurement

Code will result in the loss of the opportunity to purchase the equipment.

* Most agencies include a price quote from the vendor selling the used equipment, and also obtain a price quote for the same equipment new (if available), to show the price difference/savings.

Definition:An emergency condition is a situation which creates a threat to public health, welfare, safety, or public property. The existence of such condition creates an immediate and serious need for supplies, services, or major repairs that cannot be met through normal procurement methods. Emergency purchases shall be limited to only those supplies, services, or major repair items necessary to meet the emergency.

TWO TYPES OF EMERGENCIES:1. Catastrophic – Declared Emergency by the Governor2. Usual Emergencies – R.S. 39:1598 and LAC 34:1101-1111Any state agency may make emergency procurements of up to $5,000 when an emergency condition arises. Prior to all emergency procurements of $5,000 or more, the Chief Procurement Officer, head of a State Agency, or

either officer’s designee shall approve the procurement. Fax or phone requests should be obtained if time permits, and the agency must submit adequate justification for the emergency.Agencies should contact OSP to obtain an Emergency Approval Number prior to making a “usual emergency” purchase. Document your file with this number, and reference it when submitting the purchase for approval.

EMERGENCY PURCHASE

EMERGENCY PURCHASE• OSP’s website has an Emergency Procurement guide available.

When there is an anticipated catastrophe such as a hurricane, you may want to print this information prior to the occurrence. Hyperlinks are throughout the document and you may want to link to them and print those also. (In case you lose power, etc)

http://www.doa.la.gov/osp/agencycenter/publications/emergencyprocurement.pdf

EMERGENCY PURCHASEOSP has also set up a number of existing Emergency State Contracts. Link to eCat (Electronic Catalog) from OSP’s website or from LaGov, and type “emergency” (without quotation marks) in Contract Description, hit “enter” or click “find it” and a list of all emergency contracts will display.

SMALL PURCHASE EXECUTIVE ORDER

JBE 16-39Governs purchases under $25,000 and other applicable

procurements which are exempt from the competitive sealed bidding requirement. Note: Does not include public works contracts greater than $5,000; and items covered by existing contracts.

Sections 4A-B of the EO give guidelines for items that DO have to be competitively bid, that are over $5,000 and under $25,000.

- Purchases exceeding $5,000.00 but less than $15,000.00 require 3 quotations from bona fide, qualified vendors. Whenever possible, at least 1 of the vendors shall be a SEBD (small & emerging business).- Purchases exceeding $15,000.00 but less than $25,000.00 require 5 quotations from bona fide, qualified vendors. Whenever possible, at least 2 of the vendors shall be a SEBD (small & emerging business).

Agencies should contact OSP via phone or email for permission to obtain quotes prior to bidding any item over your DPA, if it is not specifically covered by an exemption listed in 5B. If approved, OSP will issue an approval number. The agency will then obtain quotes (make sure they are “apples to apples”, and submit documentation with your shopping cart, referencing your approval number.

SMALL PURCHASE EXECUTIVE ORDER

JBE 16-39

To find SEBD vendors for any commodity, the easiest way to is to search using the LaPAC website: LaPAC / Vendor Registration Menu / Search for Registered Vendors (LaGov)

SMALL PURCHASE EXECUTIVE ORDER

JBE 16-39

Section 5A of the EO lists specific items that do not have to be competitively bid. Please note that some categories have had dollar limit “caps” added. If your purchase exceeds the cap, you must either obtain quotes, or process it as a sole source.

Commonly used 5A exemptions (not covered elsewhere in this presentation):

• Purchasing transactions between governmental entities• Publications or copyrighted materials purchased directly from the

publisher/copyright holder• Educational training, including instructor fees & related resources, including

membership in and accreditations by professional societies & organizations• Advertising to reach targeted audiences• There are 31 total exemptions listed in EO 5.A

SMALL PURCHASE EXECUTIVE ORDER

JBE 16-39

Section 5B of the EO lists specific items that DO have to be competitively bid, but you are only required to obtain telephone or fax quotes from at least 3 bona fide, qualified vendors. Please note that some categories have had dollar limit “caps” added.

Whenever possible, at least 1 of the vendors shall be a SEBD (certified small & emerging business).

Commonly used 5B exemptions:

• Farm products, such as fresh vegetables, milk, eggs, fish and other perishable foods, when it has been determined that market conditions are unstable, & the sealed bid process is not conducive for obtaining the lowest prices

• Gasoline & fuel purchases (not on state contract, and not exceeding $10,000)• Livestock feed commodities (not exceeding $10,000)• Seed commodities, as well as related fertilizers, herbicides, insecticides &

fungicides (not on state contract)• There are 9 total exemptions listed in EO 5.B

CONTACT INFORMATION:

Lynn Godwin, State Procurement ManagerEmail: Lynn.Godwin@LA.GOVPhone: 225-342-8033

Reggie Dumas, State Procurement OfficerEmail: Reginald.Dumas@LA.GOVPhone: 225-342-5504

QUESTIONS ???

OSP Website: http://www.doa.la.gov/Pages/osp/Index.aspxOSP Help Desk - Purchasing: DOA-OSPhelpdesk@la.gov

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CONFERENCE!!!!