Presentation on theme: "Purchasing Basics for Municipal, Joint and County Public Libraries"— Presentation transcript:
1Purchasing Basics for Municipal, Joint and County Public Libraries Gordon BallProcurement Specialist, Division of Local Government Services, State Department of Community AffairsPresentation created by:Victoria RoschAssociate State Librarian, Library Support ServicesNew Jersey State Library
2Local Agency Procurement Laws NJSA 40A:11-1 governs the award of contracts for services for boards and public entities including municipal, joint and county librariesAssociation libraries (non-profits) do not have to comply, but may want to as a “best practice” since they accept public fundingResources: NJ Local Agency Procurement Laws at
3Purchasing ProcessesThere are three main processes for most purchases: bid, quote or use of sound business judgmentWhich process to use is determined by many factors such as what is being purchased, the cost of the purchase (threshold), and whether or not the library has a Qualified Purchasing AgentThere are Statutes that exempt certain categories (not many) from this process
4Thresholds and Qualified Staff Designation as a Qualified Purchasing Agent (QPA) requires a certificate issued by the Division of Local Government Services as well as ongoing trainingMost libraries do not have a QPA and must meet the threshold standards for those local government units without a QPA
5Business Judgment? Quote? Bid? Less than $2,625Use sound business judgment$2,625 - $17,499Get 2 quotes for services from 15% of bid threshold up to the bid threshold$17,500Requires the bidding process - complicated procedure - work closely with municipal officials and lawyer*current as of
6Purchases Exempted By NJSA 40:54-12.1 and NJSA 40:33-8.1 The board of trustees (The county library commission…) … may, within the limits of funds appropriated, purchase the following without advertising for bids: 1. library materials including books, sound recordings, videos, and audiovisual materials; 2. Necessary rebinding; and 3. specialized library services (NJSA 40: )“Specialized library services” must be determined cautiously – digitization may qualify, but an integrated library system does not – seek the advice of a QPA or the Division of Local Government Services
7Exceptions PermittedEmergencies affecting public health, safety and welfare – adopt a resolution and file a report with the Division of Local Government ServicesSingle Source (really rare) – apply for State Treasurer approval through the Division of Local Government Services
8Alternate Methods of Purchase Competitive Contracting (NJSA 40A:11-4 Purchasing integrated library system which would exceed the bid thresholdConcessions – for example, receiving funding from a book rental service (like Bookswim) in an amount exceeding the bid threshold might use competitive contractingNote: Private companies making money from a taxpayer-funded property (like a website hosting private advertising, or a link to Amazon) does not appear to be supported by law – check with your attorney
9Alternate Methods of Purchase Concessions (NJAC 5:34-9.4 (g)) If it is estimated that the library will receive less than $17,500 from all vendors providing a certain service, and therefore this would be a non-competitive contract, the rationale for this decision must be documented and the quotation process may be usedIf it is estimated that the library will receive $17,500 or more from all vendors providing a certain service, the library will need to go through the formal bid or competitive contracting process
10How to Determine Thresholds Amount for determining whether to use the bid, quote or use of sound business judgment process is based on the aggregation of all purchases and anticipated purchases for the year (or contract period) for the provision or performance of any goods or services (whether one or more vendors)Pay-To-Play threshold ($17,500*) is based on the aggregation of a single vendor’s cumulative contractsBusiness Registration Certificate threshold ($2,625*) is based on a single vendor’s cumulative contracts*current as of
11Business Registration Program PL. 2004, c.57 affects purchasing of goods and services over $2,625 (vendor’s cumulative contracts not aggregation by type of goods or services)Library materials are not exemptOnly required to obtain one time unless business address changesFor instructions on implementing the law see:Effective September 1, 2004Both in-state and out-of-state vendors, corporations and personal service contracts must submit a copy of a "Business Registration Certificate" to a public agency before the agency issues a purchase order and/or pays the vendor.No materials or services are exempt from this law even though the Local Public Contracts law otherwise exempts libraries from the quote and bid process for library materialsThe purpose of contractor registration is to have vendors comply with the law on non-government contracts so that they pay the required taxes.
12Pay-To-PlayChapter 271, P.L and Chapter 19, P.L (as amended by P.L. 2005, c.51); N.J.S.A. 19:44A-20.4 et seq.Applies to any aggregate amount per vendor of $17,500 or more per year or contract period and this includes library materialsFor information see:
13Purchasing Services from a Nonprofit Nonprofits that contract with government entities are not required to file the Business Entity Annual Statement (PL 2007, c304)Review of process/issues regarding purchasing services through library consortia fees
14State Contract and State Cooperative Purchasing A good place to start is Treasury’s FAQ on this subject (http://www.state.nj.us/treasury/purchase/coop_faq.shtml)You may search by vendor or specific product or serviceIf a vendor states they are on State contract, check to make sure this is true for the item you are purchasingUsing this method eliminates the need for the library to obtain bids, quotes, the Business Registration and follow Pay to Play rules
15Local or National Cooperative Contract National Cooperative contracts - carefully review Local Finance Notice (http://www.state.nj.us/dca/divisions/dlgs/lfns/12/ pdf), state laws affecting the agency’s contracting authority, and relevant case law affecting the use of national cooperatives.Local Cooperative contracts (for example utilities) may be available
16Hiring ProfessionalsAttorneys, engineers, architects, etc. must all file a Business Registration if the professional services are over the 15% bid thresholdBidding is not required (NJSA 40A:11-5 (1)(a)(i)), but it is best to use the Competitive Contracting procedure as found in NJSA 40A: for hiring professionals (also see the administrative code at NJAC 5: et seq.)Pay-to-Play laws must be followed if not using a "transparent" method and if spending above the $17,500 threshold
17Resolution for Hiring Professionals "The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed once, in the official newspaper, a brief notice stating the nature, duration, service and amount of the contract, and that the contract is on file and available for public inspection in the office of the clerk..."
18Sample Newspaper Notice for Contract Award CONTRACT AWARD SAMPLE NEWSPAPER NOTICEThe following is a sample resolutions for publishing Notices of Contract Award for Professional Services.Professional Services - LocalNotice of Contract AwardThe (name of the local government unit) has awarded a contract without competitivebidding as a professional service pursuant to N.J.S.A. 40A:11-5(1)(a)(i). The contract and the resolution authorizing it are on file and available for public inspection in the office of (municipal clerk)Awarded to: _____________________________________________Duration: _____________________________________________Nature and type of contract: _________________________________Amount of Contract*: _________________________________*Indicate by dollar value of contract, per hour/per occurrence, pursuant to schedule ofrates/fees contained in the contract
19Discarding/Selling Government Property Estimated fair value of the property or group of items to be sold at the same time is:Below 15% of the bid threshold ($2,625*), item/s may be disposed of as deemed appropriate for a government entity - trash, recycle, given to association library or sold at private sale without advertising for bids (NJSA (40A:11-36 (6)).Equal to or over 15% of the bid threshold and the purchaser is another government entity, a mutually agreeable price is negotiated and both units pass resolutions verifying the sale. Equal to or over 15% of the bid threshold and the purchaser is NOT another government entity, publically offer the item/s through a sealed bid or auction process by live auction or an on-line auction.*current as of
20Resources Gordon Ball: Gordon.Ball@dca.state.nj.us or (609) 633-6152. ; Part 6: PurchasingEvery director should be a member of the State Library’s listserv - njpublibs.