Taking the Puzzle Out of Procurement or How To Do Business With Procurement and Materials...
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Transcript of Taking the Puzzle Out of Procurement or How To Do Business With Procurement and Materials...
Taking the Puzzle Out Taking the Puzzle Out of Procurement of Procurement
or or How To Do Business How To Do Business
With Procurement and With Procurement and Materials ManagementMaterials Management
We will cover ...We will cover ... • Introduction - Who We Are• Where to Find Purchasing
Information• Purchasing Lead Times• Delegated Purchasing Tools• Purchasing Ethics
We will Cover...We will Cover...
• Explanation of the Competitive Procurement Process
• Sole Source Procurement• Procurement using Federal funds• Minority, Small and
Disadvantaged Vendor Programs
We Will CoverWe Will Cover
• Procurement File Documentation • Receiving and Shipping
Procedures • Contract Administration• Disposal of Surplus Property
Procurement and Procurement and Materials Materials
ManagementManagementBlair Blankinship
Director of Procurement and Materials Management
Toni WallingtonAssistant Director
Nancy WrightContract Specialist
Lisa EdwardsProperty Control
Dee McGhin
Purchasing Card Administrator and
Purchasing Assistant
Wally Humphrey
Receiving Specialist
Code of EthicsCode of Ethics• Give Vendors Equal Consideration
• Strive to obtain the maximum value for each dollar of expenditure
• Do Not Accept Gifts or Gratuities such as– Tickets to sporting or entertainment
events, golf outings, expensive after hours dinners
Page 4
Code Of Ethics Code Of Ethics (Continued)(Continued)
• Avoid Appearance of Conflict of Interest – Do not place orders with relatives
or firms with whom you have some ownership or relationship
• Conduct business with potential and current suppliers in an atmosphere of good faith, devoid of intentional misrepresentation.
Procurement Procurement Administrative Lead Administrative Lead
TimeTime• Purchases using the UM
Purchasing Card• Transaction under $5,000
handled in Procurement• Greater than $5,000 Less
than $100,000• Greater than $100,000
Page 3
•Same Day
•3 days
•10 to 14 days
•Milestone Plan
MISSIONMISSION
In support of the University’s mission of excellence in education, research, outreach and collaborative partnerships with the greater community, the Department of Procurement and Materials Management will:
Establish and administer contracts effectively. Procure goods and services for best value. Delegate procurement authority using the Purchasing Card program to promote efficiency. Provide materials management services, including central receiving, physical distribution, and property control functions that add value for campus customers. Coordinate the State’s self insurance program and provide risk management services.•Support the State of Maryland Minority Business Enterprise program and the Federal Small and Disadvantaged Business Programs. • Participate in campus sponsored community outreach.• Ensure University business is conducted in a fair and open environment, in full compliance with applicable laws and regulations.
Where to Find Where to Find Purchasing Purchasing InformationInformation
• Procurement & Supply Home Page– www.ubalt.edu/procurement
DELEGATED DELEGATED PROCUREMENTPROCUREMENT
• The Purchasing Card Program– Allows authorized cardholders to
make purchases up to $5,000.– Monthly purchase limit based on
your needs.
Page 7
Purchasing CardPurchasing Card• Simple to Use, Saves Paperwork
• Place order immediately - no waiting
• No Cost for Card
• Vendors Paid within 3 Days
• Major Cost Avoidance for the University
Purchasing Card Purchasing Card
• Not for Travel or Restaurants – Travel Card is available (60% rolled
out) www.dbs.umd.edu/travel
• Cards Must NOT be shared
• Issued in Individual’s Name • Graduate/Research Assistants can
get cardsPage 8
P-Card SafeguardsP-Card Safeguards• Issued only to Employees
Authorized by Department Head
• Cardholders Sign Agreement
• Cardholders Trained
• Employee Keeps Log of Transactions and Reconciles with Monthly Visa Statement
Purchasing Card Purchasing Card AbuseAbuse
• Man who abused county credit card must repay $27,000, serve probation
– Ex-supervisor also gets two weekends in jail – By Andrea F. Siegel– Sun Staff - Originally published February 22, 2001– The former Anne Arundel County warehouse supervisor who used a county-issued
credit card to buy himself dozens of items that ranged from a "Star Wars" pinball machine to Raisinettes was ordered yesterday to repay the county nearly $27,000, spend two weekends in jail and five years on supervised probation.
– The judge was unsympathetic to Middleton's assertion of financial difficulties…she said. Chiding him for betraying the public's trust, Judge Davis-Loomis asked, "How closely does an employer have to monitor an employee whom they trust?"
– The maximum punishment for a felony theft scheme, to which Middleton pleaded guilty last month, is 15 years in prison and a $1,000 fine. However, he has no criminal record, and his sentence was within state guidelines of probation to six months.
– Copyright © 2001, The Baltimore Sun
How To Get How To Get Purchasing Cards?Purchasing Cards?
• Submit Cardholder Agreements and information form to Procurement. (see http://www.ubalt.edu/procurement/pcard.htm)
• Cardholders Attend Cardholder Training to get Card (Allow 2 wks)
Priority of Procurement Priority of Procurement Sources Sources
• Share Equipment or Buy Used
• UB In-House Services
• State Use Industries
• Blind Industries & Services of MD
• Maryland Sheltered Workshops
• Master Contracts
• Small & Minority Vendors
Classification by SizeClassification by Size
• $5,000 and under Micro Procurement– Delegated to Campus
• $5,001 - $100,000 - Simplified Acquisition – Handled by Procurement and Supply
• Over $100,000 - Formal Procurement
Page 10
Simplified AcquisitionSimplified Acquisition• $5,001 to $100,000
• Handled by Procurement – Issue purchase order with 14 days
• Simplified refers to the more streamlined process the Buyer in Procurement will use to execute these transactions
Requisition for Requisition for PurchasePurchase
• Create an electronic Requisition in PeopleSoft
• Three step approval process1. Amount Approval in Department2. Chartfield Approval in Finance3. Budget Check by Requestor
Requisition Must HaveRequisition Must Have
• Complete information– who, what, where, when, why
• Sufficient time for process– Give a realistic date for delivery -
not ASAP
Request For QuotationRequest For Quotation
• Typically, Procurement will send a Request For Quotation (RFQ) to several suppliers.
• If your requirement is a Sole Source, provide a written Justification for Sole Source
Formal ProcurementFormal Procurement
• Greater than $100,000• Handled by Procurement and
Supply• Customer will assist in the
development of a milestone plan• Requires more teamwork
between Procurement and customer
Milestone Plan and Milestone Plan and Source Selection PlanSource Selection Plan
• Milestone Plan– Documentation of action items,
person responsible and due date
• Source Selection Plan– Method we will use to select a
contractor
Page 11
Milestones in the RFP Milestones in the RFP ProcessProcess
• Requestor Develops Scope of Work• Procurement Develops Source
Selection Plan• Joint Development of RFP Document• Release of RFP to Vendors &
Published in Maryland Contract Weekly
• Determinations
MBE Subcontract GoalMBE Subcontract Goal
• Procurement and Supply will establish a Minority Business Enterprise subcontract goal for each procurement over $100,000.
• Goal is determined for each procurement based on the availability of MBE contractors in that market and the nature of the requirement.
The SolicitationThe Solicitation• Request For Proposals (RFP)
– Best Value
• Invitation For Bids (IFB)– Low Bid
• Sole Source– Limited circumstances with
adequate justification– Still need a formal proposal from
contractor
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Publication of the Publication of the RequirementRequirement
• Maryland Contract Weekly• e-Maryland M@rketplace• Others as necessary
– Length of time before due date is now flexible
Pre-solicitation Pre-solicitation conferenceconference
• Prospective contractors may ask questions about the work to be preformed or about the procurement process.
• May also include a visit to the site where the work will be performed.
Evaluation of OffersEvaluation of Offers
• Based only on criteria stated in the solicitation– IFB - low price the meets the
specifications– RFP - best value with separate
evaluation of technical proposal and price
Page 14
RFP EvaluationRFP Evaluation
• Evaluation committee reviews proposals
• identifies areas that need clarification
• May have oral presentation or demonstration if provided for in RFP
RFP EvaluationRFP Evaluation
• Committee writes narrative summary of proposal strengths and weaknesses
• Consensus evaluation
RFP EvaluationRFP Evaluation
• After technical evaluation has been completed review summary of price proposals from Procurement.
• Determine final ranking and justify best value decision.
Sole Source Sole Source ProcurementProcurement
• Customer makes request and justification.
• Procurement without competition is authorized under limited conditions and subject to written justification documenting the conditions that preclude the use of a competitive process.
Page 16
Sole Source Sole Source DeterminationDetermination
• Procurement reviews justification.
• Performs independent research.• Writes Sole Source
Determination• Approved by Director of
Procurement
Sole Source ContractSole Source Contract
• Procurement issues Sole Source RFP– greater than $100,000
• get formal proposal from contractor
• contractor reviews and signs our terms, conditions, affidavits and certifications
Sole Source ContractSole Source Contract
• Procurement and Supply determines price reasonableness
• Procurement and Supply determines contractor responsibility– past performance– technical capabilities– financial stability
Special ApprovalsSpecial Approvals
• First the good news!– No More BB-4 form– No More RIP form– Board of Public Works (BPW) now
$500,000 for construction and services (no longer $25,000)
• Other State Agencies still saddled with old rules.
Page 20
Special ApprovalsSpecial Approvals
• Alcoholic Beverages - purchase of such beverages with University-controlled funds is not permitted except when purchased for resale.
ApprovalsApprovals
• Purchases Affecting Buildings and Utilities. Heavy items, very large items, utilities hook‑up, modification to a structure, or pose hazardous or safety concerns, must be reviewed and approved.
Special ApprovalsSpecial Approvals• Purchases Using Sponsored
Programs Funds– equipment with a unit value greater
than $5,000 must first be approved by the Comptroller’s Office, Inventory Control.
– Purchases using sponsored programs funds for services with a value greater than $5,000 must first be approved by the ORAA
Special ApprovalsSpecial Approvals
Radioactive And Hazardous Materials – approved by the Radiation Safety
Officer, Environmental Safety
Special ApprovalsSpecial Approvals
•Live Vertebrate Animals– Animals with backbones must first
have their Animal Care Protocol approved by campus Animal Care and Use Committee.
•Motor Vehicles – Purchase or leasing of motor
vehicles requires prior approval by the Fleet Administrator.
Special ApprovalsSpecial Approvals
• Real Property– Purchase, leases and rentals of land and
structures usually require special processing and approval
• Legal Representation – Hiring of Attorneys must be coordinated
with the President’s Office of Legal Affairs.
Special ApprovalsSpecial Approvals• Insurance
– University is generally prohibited from purchasing insurance.
– Need a certificate of insurance? Contact Blair Blankinship, 301-405-5837
• Vendor Agreements, Licenses, Waivers, Contracts and Contract Modifications. – All such documents require Procurement’s review for
objectionable terms. – Other University personnel are not authorized to sign such
documents and may be personally liable for the obligations in the agreement.
Consulting Consulting AgreementsAgreements
• Consulting services are, in principle, no different from any other contract for services.
• Contracts over $5,000 must be coordinated with Procurement.
• Travel and accommodations costs can be included in the contracts.– travel and accommodations should be
consistent with University travel guidelines.
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Consulting Consulting AgreementsAgreements
• Cannot treat consultants as employees.
• To avoid conflict with IRS rules consult with Procurement and Supply or the President’s Office of Legal Affairs.
Furniture PurchasesFurniture Purchases
• State Use Industries should be evaluated for all furniture purchases.
• If State Use Industries (SUI) can satisfy your requirements we must use SUI.
Page 21
State Use Industries State Use Industries FurnitureFurniture
• Five exceptions are recognized by law for not purchasing from SUI:– SUI cannot provide the items within a reasonable
time– SUI cannot meet reasonable specification.– The cost of purchasing from SUI exceeds the
budgetary allowance.– The procurement is an emergency procurement as
defined by law - necessary to avoid or to mitigate serious damage to public health, safety and welfare.
– The item is not available from SUI.
• You must document the reason!
Special ApprovalsSpecial Approvals
• Contracts for construction or services over $500,000 require prior approval of the MD Board of Public Works.– Who? The Governor, Comptroller and
Treasurer.
• Contracts over $5 Million require prior approval of the USM Board of Regents.
Exemptions from Exemptions from Standard ProceduresStandard Procedures
• Several categories of items are excluded from the USM Procurement Policies and Procedures– Real Property– Disposal of Surplus Property– Collaborative Undertakings– Intergovernmental contracts– Purchases for resale– Cultural, entertainment and
intercollegiate athletics
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ExclusionsExclusions• Protection and administration of intellectual
property rights• Housing, food and related supply and
service contract for conference facilities• Contracts for programs and operations
located or implemented overseas or out-of-state
• Procurement in conflict with a governing federal law or the terms of a gift
• purchase, use or development of curricular materials
Purchasing Rules Apply Purchasing Rules Apply Regardless of Funding Regardless of Funding
SourceSource
• University Procurement Rules Apply to Grants and Contracts
A110 C.43 A110 C.43 CompetitionCompetition Preferred Preferred
• Maximum extent practical
• Specification developer excluded
• Award to most advantageous and responsive offer– Price, quality, other written factors
Procurement and Procurement and SupplySupply
• Has responsibility for obligating funds for procurements and signing contracts
• Responsibilities include– Seeking Maximum Practical Competition– Making Formal Determinations – Issuing Purchase Orders & Contracts– Establishing Master Contracts
Solicitation StandardsSolicitation Standards
• Clear description, no restrictive specifications
• Vendor requirements, evaluation factors
• Functional or performance specifications– Range or minimum
Solicitation StandardsSolicitation Standards
• Specify salient characteristics of the item if using Brand Name or Equal
• Preferences– Metric Measurement– Environmentally friendly– Energy efficient– Recycled
Other Federal Other Federal Concerns (Grant and Concerns (Grant and
Contract)Contract)• Food
• US Flagged vessels and planes
• Restricted entities/governments• http://www.arnet.gov/epls/
• Federal provisions for purchase orders/contracts
Small Business Small Business Subcontracting Plans Subcontracting Plans
Set Goals for Awards To:Set Goals for Awards To:
• Small businesses• Disadvantaged firms• Women owned business
enterprises• HUB-Zone firms• HBCU and MI• Veteran owned firms
Small Business Small Business DefinitionDefinition
• Service - Average Receipts NTE $2.5 - $21.5 Million
• Manufacturers - # Employees 500-1500
• Supplies - less than 500 employees
Disadvantaged FirmsDisadvantaged Firms
• Changed 10/11/99
• Certification by Small Business Administration (SBA) required
Which Firms are Which Firms are Small, Women-Owned, Small, Women-Owned,
Etc?Etc?
• www.pro-net.sba.gov– Identify a specific firm– List small firms for a specific SIC
code
• www.sba.gov/hubzone– See handout– Identify by County
Report ofReport ofSmall Business Small Business
SpendingSpending• SF 294 Form
– Individual contract over $500,000
• SF 295 Form – Summary of all contracts for each
sponsor
• Reports generated twice each year by Procurement with assistance from ORAA and Comptroller
Minority Business Minority Business EnterpriseEnterprise
• Minority Business Enterprise (MBE)
• State socioeconomic program to support historically underutilized businesses.
• House Bill 306 - Maryland Law sets goals
Certification for MBE Certification for MBE contractorscontractors
• To be counted a firm must be certified by MD Dept. of Transporation
• Approx. 2700 firms certified• Database available at
– http://www.mdot.state.md.us/cgi-bin/mbedir/mbedirectory
– link from Procurement’s web site
Minority Business Minority Business Participation GoalParticipation Goal
• FY 03 goal is 25% of dollars spend to be spent with MBE contractors or subcontractors
• 10% sub-goal for women owned businesses and 7% for African American owned businesses
• Included - not additional
Chancellor and President Chancellor and President Mote support MBE Mote support MBE
programprogram• The UM and USM Board of Regents supports
the State’s efforts to increase business opportunities for MBE’s – Firms that have demonstrated time and again the
ability to provide excellent products and services• Increasing the MBE participation to 25 percent
is a significant challenge. • We also need the assistance and aggressive
effort of every unit on campus to achieve these new MBE goals.
Review of Each Review of Each ProcurementProcurement
• Procurement and Supply will review each procurement to determine if MBEs are available for solicitation.
• Each Procurement over $100,000 will have MBE contract or subcontract goal.
DocumentationDocumentation
• The procurement process is complex and detail oriented. Good business judgement as well as policy and procedure dictate that complete and accurate records must be created and maintained.
DocumentationDocumentation• Each file should be well documented
– understand the need for and nature of the procurement
– know who requested, who funded and who issued/authorized the contract
– understand the rights and responsibilities of all parties
– understand how contractor was selected– understand the price of the contract and
price analysis performed to determine that the price is fair and reasonable
– understand the rationale that supports the finding that the contractor is “Responsible”
– understand all important contract dates
Documentation of P-Documentation of P-Card TransactionsCard Transactions
• Completed Purchasing Card Transaction Log clearly describing the goods or services, detailed receipts, and a reconciled Visa statement for each billing period. – The Transaction Log must be signed
by the cardholder and assigned reviewer.
Records of Large Records of Large TransactionsTransactions
• Records and reports for Transactions handled by Procurement will be maintained in Procurement and Supply’s files.
• Departments should keep copies of Requisition and other related files.
Goods Received by Goods Received by the Requestor the Requestor
• Review Delivery/Shipping Documents• Inspect Shipment• If count is incorrect or damage is apparent
– Record discrepancy on delivery document (short one piece, etc.)– Have delivery person sign acknowledgement of statement with
signature or initials– Make a copy of the signed document for your records– Sign document and accept delivery– Contact Procurement for Assistance if necessary.
• If UPS or FedEx and shipment is damaged, record discrepancy and refuse shipment
Shipping Goods from Shipping Goods from CampusCampus
• Get a “Return Authorization” from Contractor to whom you are shipping
• Insure outbound shipments• Keep accurate records
Household MovesHousehold Moves
• Procurement has contracts for household moves.
• Contact Blair Blankinship, 410-837-5714 for assistance.
• Please allow approximately four weeks for the bid process, especially during peak season (June, July and August)
Contract Contract AdministrationAdministration
• Small purchase of supplies– contract administration may be no
more than verifying that the ordered item was received on time, at the right location and the price on the invoice is equivalent to the price on the purchase order, P-Card order, etc
• complex procurement – contract administration is a
responsibility that is shared between Procurement and Supply and the customer
Contract Contract AdministrationAdministration
• Complex Procurement– Contract Kick-Off Meeting– Identification of Using Department
Program Manager– Identification of Contractor
Technical or Service Representative
Contract Contract AdministrationAdministration
• Early and effective communication between all parties (including Procurement)
• Detailed documentation of performance– Good or Bad!
Disposal of Surplus Disposal of Surplus PropertyProperty
• Property Control• Located in the Academic Center• Contact Lisa Edwards (X5242) for
assistance
We Discussed…We Discussed… • Key Purchasing Principles
• Where to Find Purchasing Information
• Purchasing Processes, Procedures, Lead Times
• Purchasing Restrictions
• Federal Subcontract Plans & Reports
QuestionsQuestions
• Blair Blankinship, Director of Procurement and Material Management [email protected] 410-837-5714