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Purchasing 101 Janet Powell, Director of WFISD Support Services 235-1018 Introduction to the Anywhere ISD Purchasing Processes.

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Presentation on theme: "Purchasing 101 Janet Powell, Director of WFISD Support Services 235-1018 Introduction to the Anywhere ISD Purchasing Processes."— Presentation transcript:

1 Purchasing 101 Janet Powell, Director of WFISD Support Services Introduction to the Anywhere ISD Purchasing Processes

2 The Foundation and Structure Why we do what we do…

3 The Governmental Requirements The LawThe Law Texas Education Code through Texas Education Code through Purchasing Contracts – Purchasing Contracts – All purchases made over $50,000 must follow one of the defined purchasing methodsAll purchases made over $50,000 must follow one of the defined purchasing methods What criteria can be used to determine an award (“Best Value”)What criteria can be used to determine an award (“Best Value”) Public advertisement in a local newspaperPublic advertisement in a local newspaper Definition of and procedure for making an emergency purchaseDefinition of and procedure for making an emergency purchase Criminal Penalties – Criminal Penalties – Construction Services – through.041Construction Services – through.041

4 The Governmental Requirements (cont.) District PolicyDistrict Policy CH (Legal)CH (Legal) Based directly on governing statutesBased directly on governing statutes CH (Local) – Purchasing AcquisitionCH (Local) – Purchasing Acquisition Purchasing AuthorityPurchasing Authority Competitive Procurement RequirementsCompetitive Procurement Requirements Interlocal AgreementsInterlocal Agreements Vendor’s ListVendor’s List Bids and Proposals under $10,000Bids and Proposals under $10,000 Information Technology Purchases under $25,000Information Technology Purchases under $25,000 Employee Conflict of InterestEmployee Conflict of Interest

5 The District Requirements Financial Information Resource Manual (FIRM)Financial Information Resource Manual (FIRM) Purchasing RequirementsPurchasing Requirements Purchasing OrganizationPurchasing Organization How to make a District PurchaseHow to make a District Purchase Sole Source ProcurementsSole Source Procurements Personal, Consulting and Professional ServicesPersonal, Consulting and Professional Services Purchase Requisition PreparationPurchase Requisition Preparation Purchase Order ReceivingPurchase Order Receiving Purchasing with a Purchasing CardPurchasing with a Purchasing Card

6 The District Requirements (cont.) Financial Information Resource Manual (FIRM)Financial Information Resource Manual (FIRM) Vendor SelectionVendor Selection Purchasing EthicsPurchasing Ethics Purchasing ContractsPurchasing Contracts Available at: at:

7 Historical Perspective for Round Rock ISD In 2007 – 2008:In 2007 – 2008: The RRISD spent over $62 million dollars in purchase ordersThe RRISD spent over $62 million dollars in purchase orders The Purchasing Office issued over 9,400 purchase ordersThe Purchasing Office issued over 9,400 purchase orders There were a total of 32,351 procurement card transactionsThere were a total of 32,351 procurement card transactions The District spent $4 million in procurement card transactionsThe District spent $4 million in procurement card transactions The Purchasing Office awarded 108 contracts worth over $100 millionThe Purchasing Office awarded 108 contracts worth over $100 million Distribution received 16,328 warehouse requisitions worth $1.7 millionDistribution received 16,328 warehouse requisitions worth $1.7 million Print Services made 50 million impressions, and over 48 million impressions were made on convenience copiersPrint Services made 50 million impressions, and over 48 million impressions were made on convenience copiers Text Books managed $15 million of text booksText Books managed $15 million of text books

8 Purchasing Ethics Responsibility to the tax payer to use the District funds appropriatelyResponsibility to the tax payer to use the District funds appropriately Develop good relationships with suppliers and encouraging competition while avoiding an appearance of favoritism or misconductDevelop 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 interpretationsEmployees are not to circumvent laws, policies, and procedures, or make liberal interpretations Not make intentional sequential or component purchases to circumvent requirementsNot make intentional sequential or component purchases to circumvent requirements Failure to follow State laws and District policy will render the purchase non-compliantFailure to follow State laws and District policy will render the purchase non-compliant

9 Purchasing Ethics (cont.) Receipt of gifts, kickbacks or gratuities are not acceptable and may lead to disciplinary actions if necessaryReceipt of gifts, kickbacks or gratuities are not acceptable and may lead to disciplinary actions if necessary Opened acknowledgement of conflicts of interestOpened acknowledgement of conflicts of interest Failure to follow requirements may have criminal penaltiesFailure to follow requirements may have criminal penalties Remember: Do the Newspaper Test for all purchases

10 The Organization What we look like…

11 The Purchasing Office’s Role District-wide Perspective

12 The Purchasing Office’s Role (cont.) Purchasing Department Director of Business / Budget Services

13 Authority and Aggregation Centralized Buying AuthorityCentralized Buying Authority The Purchasing Office has been tasked with overseeing all purchasing activity in the District and has been delegated down to the individual campuses and departmentsThe Purchasing Office has been tasked with overseeing all purchasing activity in the District and has been delegated down to the individual campuses and departments The District is recognized as a whole, not as individual entitiesThe District is recognized as a whole, not as individual entities Purchases by all campuses and departments are aggregated together for a particular category to determine the annual expenditurePurchases by all campuses and departments are aggregated together for a particular category to determine the annual expenditure The annual expenditure will determine which purchasing method is to be usedThe annual expenditure will determine which purchasing method is to be used

14 Aggregation Example 30 Elementary Schools 9 Middle Schools 4 High SchoolsAdministration Aggregation of all purchases Example: If each campus purchases 10 of the same book worth $25, the District as a whole has spent $10,750.

15 Contracts, Agreements and Funds Contracts / agreements can only be signed by the Superintendent or Chief Financial OfficerContracts / agreements can only be signed by the Superintendent or Chief Financial Officer Signature from any other non-delegated District employee will render the agreement voidSignature from any other non-delegated District employee will render the agreement void By signing an agreement on behalf of the District may create on obligation on the individual to payBy signing an agreement on behalf of the District may create on obligation on the individual to pay Types of Funds that must follow Purchasing Requirements:Types of Funds that must follow Purchasing Requirements: General FundGeneral Fund All Activity FundsAll Activity Funds Federal Funds (must be more restrictive than federal guidelines)Federal Funds (must be more restrictive than federal guidelines)

16 District’s Electronic Procurement System eROCeROC Online registration for suppliersOnline registration for suppliers Electronic ( ) notification of bid opportunitiesElectronic ( ) notification of bid opportunities Electronic biddingElectronic bidding Electronic tabulation of bid responsesElectronic tabulation of bid responses Information and Login at: and Login at:

17 Purchasing Flow From start to finish – and what to do…

18 RRISD Purchasing Process Flow

19 Established Resources No bidding necessary…

20 Process 1: Warehouse OverviewOverview Many items are available through the Warehouse:Many items are available through the Warehouse: Bond PaperBond Paper Industrial PapersIndustrial Papers FurnitureFurniture FixturesFixtures Maintenance SuppliesMaintenance Supplies Housekeeping SuppliesHousekeeping Supplies Review inventory choices through District SoftwareReview inventory choices through District Software Warehouse inventory is considered an asset of the District and should be used firstWarehouse inventory is considered an asset of the District and should be used first

21 Process 2: District Contracts OverviewOverview The Purchasing Office administers approximately 150 contractsThe Purchasing Office administers approximately 150 contracts Both goods and services contractedBoth goods and services contracted Majority are term contracts with multiple extension yearsMajority are term contracts with multiple extension years The end user locates the contract information, showing items or service to be procured, the awarded vendor, and the contract priceThe end user locates the contract information, showing items or service to be procured, the awarded vendor, and the contract price

22 Process 3: Interlocal Contracts OverviewOverview All interlocal contracts and purchases are handled through the District Purchasing OfficeAll interlocal contracts and purchases are handled through the District Purchasing Office Purchasing Office will determine if the interlocal will be in the best interest of the DistrictPurchasing Office will determine if the interlocal will be in the best interest of the District An attempt should be made to get best pricing availableAn attempt should be made to get best pricing available

23 Process 4: Sole Source OverviewOverview Defined by TEC 44.03(d), District Policies CH(Legal)Defined by TEC 44.03(d), District Policies CH(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: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 monopolyan item for which competition is precluded due to the existence of a patent, copyright, secret process, or monopoly a film, manuscript, or booka film, manuscript, or book a utility service, including electricity, gas, or water, ora utility service, including electricity, gas, or water, or a captive replacement part or component for equipmenta captive replacement part or component for equipment Only goods/services that meet the definition are acceptableOnly goods/services that meet the definition are acceptable If over $10,000, letter of justification from department head required.If over $10,000, letter of justification from department head required.

24 OverviewOverview Normally includes “spot” or one time purchase itemsNormally includes “spot” or one time purchase items ProcedureProcedure Check the cumulating list of vendors based on dollar amount for current year to determine level of process (available in the future)Check the cumulating list of vendors based on dollar amount for current year to determine level of process (available in the future) No attempt at competition is requiredNo attempt at competition is required The end user is encouraged to secure competition through quotesThe end user is encouraged to secure competition through quotes Process 5 Is the item / service less than $1,000? Process 5: Purchases under $1,000

25 Process 6: Purchases Over $1,000 to $5,000 OverviewOverview For larger, one time purchasesFor larger, one time purchases ProcedureProcedure The end user is encouraged to secure competition through quotes from a minimum of three (3) vendors, with a preferable inclusion of eROC suppliersThe end user is encouraged to secure competition through quotes from a minimum of three (3) vendors, with a preferable inclusion of eROC suppliers If quotes are secured, all documentation concerning choice of vendor is to be retained by the end userIf quotes are secured, all documentation concerning choice of vendor is to be retained by the end user Process 6 Is the item / service more than $1,000 but less than $5,000?

26 The Quotation Level Competition necessary…

27 Process 7: Purchases Over $5,000 to $10,000 OverviewOverview Larger purchases that may include numerous purchases over timeLarger purchases that may include numerous purchases over time Limited Term ContractsLimited Term Contracts ProcedureProcedure A minimum of 3 suppliers must be contacted – additional may be added if necessaryA minimum of 3 suppliers must be contacted – additional may be added if necessary All quote documents (e.g. quotes, supporting spec sheets, etc.) concerning award to be retained by the end user and provided to their assigned buyer for the Purchasing fileAll quote documents (e.g. quotes, supporting spec sheets, etc.) concerning award to be retained by the end user and provided to their assigned buyer for the Purchasing file End user must request a quote number from the Purchasing Office for inclusion with the purchaser requisitionEnd user must request a quote number from the Purchasing Office for inclusion with the purchaser requisition

28 Process 7: Purchases Over $5,000 to $10,000 (cont.) RRISD Quote Summary Form

29 Formal Solicitation Thresholds Sealed Competition necessary…

30 Process 8: Purchases Over $10,000 to $25,000 OverviewOverview Used for term contracts or large one time delivery contractsUsed for term contracts or large one time delivery contracts Requires competitive sealed bid processRequires competitive sealed bid process May use best value if determine necessaryMay use best value if determine necessary Can be done quickly (within a day or two) or over a longer period of time (e.g. week)Can be done quickly (within a day or two) or over a longer period of time (e.g. week) ProcedureProcedure Campus / Department determines need and provides required information (specifications, scope, quantity, etc.)Campus / Department determines need and provides required information (specifications, scope, quantity, etc.) Purchasing Office to release, open and awardPurchasing Office to release, open and award Process 8 Is the item / service more than $10,000 but less than $25,000?

31 Process 9: Purchases Over $25,000 Process 9 Is the item / service more than $25,000? OverviewOverview Includes term contracts, large one time delivery, highly complex purchases, construction contracts, etc.Includes term contracts, large one time delivery, highly complex purchases, construction contracts, etc. Requires competitive sealed bid / proposal processRequires competitive sealed bid / proposal process Use of best value requiredUse of best value required Average 60 to 90 days (longer for complex procurements)Average 60 to 90 days (longer for complex procurements) ProcedureProcedure Campus / Department determines need and provides required information (specifications, scope, quantity, etc.)Campus / Department determines need and provides required information (specifications, scope, quantity, etc.) Purchasing Office to release, open and awardPurchasing Office to release, open and award

32 Purchasing Methods The Choices of Solicitations…

33 Purchasing Methods Request for Quotes – “RFQ”Request for Quotes – “RFQ” Can be used in Processes 3, 5, 6, and 7Can be used in Processes 3, 5, 6, and 7 Informal process – does not require sealed bidsInformal process – does not require sealed bids Request for Bids – “RFB”Request for Bids – “RFB” Can be used in Processes 8 and 9 – restricted to the Purchasing Office onlyCan be used in Processes 8 and 9 – restricted to the Purchasing Office only Formal solicitation process (sealed bids)Formal solicitation process (sealed bids) Request for Proposals – “RFP”Request for Proposals – “RFP” Only Process 9 – restricted to the Purchasing Office onlyOnly Process 9 – restricted to the Purchasing Office only Usually an elaborate eval. process with use of scoring criteriaUsually an elaborate eval. process with use of scoring criteria Allows for negotiations as to final terms, pricing, etc.Allows for negotiations as to final terms, pricing, etc.

34 Purchasing Methods (cont.) Request for Competitive Sealed Proposals – “RFCSP”Request for Competitive Sealed Proposals – “RFCSP” Only for Process 9 – restricted to the Purchasing Office onlyOnly for Process 9 – restricted to the Purchasing Office only Usually an elaborate eval process with use of scoring criteriaUsually an elaborate eval process with use of scoring criteria Allows for negotiations as to final terms, pricing, etc.Allows for negotiations as to final terms, pricing, etc. Request for Qualifications – “RFQ”Request for Qualifications – “RFQ” Only for Process 9 – restricted to the Purchasing Office onlyOnly for Process 9 – restricted to the Purchasing Office only Used for professional services onlyUsed for professional services only Request for Information – “RFI”Request for Information – “RFI” No associated process since no purchase is madeNo associated process since no purchase is made Used for investigation or researchUsed for investigation or research Helps in the development of specs or requirementsHelps in the development of specs or requirements

35 Formal Solicitation Flow A partnership with the End User and Purchasing…

36 Competitive Bidding Process - Formal Solicitation Development Purchasing ProcessContract Period Approx days

37 Specifications / Scope of Service The backbone of the solicitation…

38 Writing a Specification / Scope of Service Specifications for GoodsSpecifications for Goods Rely on the experts – good chance it’s not Purchasing – it’s youRely on the experts – good chance it’s not Purchasing – it’s you Rely on available resources – do researchRely 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 startBe 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 exclusiveBe cognizant of competition – don’t be exclusive Write specs so that you can verify what you received is what you needWrite 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 othersSpecs left out of a solicitation cannot be used as a disqualifier for others Don’t over / under do the specDon’t over / under do the spec

39 Writing a Specification / Scope of Service ServicesServices All solicitations that include a service need to have some level of scope of work included in the specificationsAll 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 procedureA 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 performedThe 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 stepIf 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 thoroughlyIf 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 measuresIf the scope is large in scale, it may require performance based measures

40 District Contracts Established Resources…

41 Contracts Active Contracts ListingActive Contracts Listing A list of all the current contracts maintained by the Purchasing Office can be found at:A list of all the current contracts maintained by the Purchasing Office can be found at: Once an item or service is under contract with a specific vendor, the District is to use the contracted vendor onlyOnce an item or service is under contract with a specific vendor, the District is to use the contracted vendor only Only the items or services awarded to a particular supplier can be purchased through a contractOnly the items or services awarded to a particular supplier can be purchased through a contract Line Item AwardsLine Item Awards This describes a contract that was awarded on a line by line basis with a set price to a specific vendorThis describes a contract that was awarded on a line by line basis with a set price to a specific vendor

42 Contracts (cont.) Catalog ContractsCatalog Contracts This describes a contract that may include multiple awarded vendorsThis describes a contract that may include multiple awarded vendors Vendor may provide a discount for purchases from a published catalogVendor may provide a discount for purchases from a published catalog Usually will include all items within the vendor’s catalog with some exceptionsUsually will include all items within the vendor’s catalog with some exceptions Prices subject to be changed based on changes / updates in the catalogPrices subject to be changed based on changes / updates in the catalog

43 Contracts (cont.) “M” Contracts“M” Contracts “M” stands for multiple“M” stands for multiple Unique contracts that do not “close” until later in the fiscal year so that suppliers can submit a response when readyUnique contracts that do not “close” until later in the fiscal year so that suppliers can submit a response when ready Awards made upon completion of an evaluationAwards made upon completion of an evaluation Examples of “M” ContractsExamples of “M” Contracts Classroom Instructional MaterialsClassroom Instructional Materials Retail General MerchandiseRetail General Merchandise Retail Food Service Providers and CateringRetail Food Service Providers and Catering FundraisersFundraisers Extracurricular / Enrichment ProgramsExtracurricular / Enrichment Programs Special Events Services and ProductsSpecial Events Services and Products

44 Vendor Relations Developing the Partnership…

45 Vendor Relations End UserVendorBuyer Communications SolicitationsSolicitations Major Contract IssuesMajor Contract Issues

46 Vendor Relations The District 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 partiesThe District 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 atAll performance related issues – good or bad - should be documented for future reference at Vendors deserve a right to know how they are doing - convey performance issues as they arise and communicate approperatelyVendors deserve a right to know how they are doing - convey performance issues as they arise and communicate approperately

47 Tools to Purchase With How to get it…

48 Procurement Cards – “Pcard” Not considered a purchasing process - only a payment method for convenienceNot considered a purchasing process - only a payment method for convenience Dollar limits are established based on position controls and will not be increasedDollar limits are established based on position controls and will not be increased All purchases made with a Pcard must follow all applicable purchasing proceduresAll purchases made with a Pcard must follow all applicable purchasing procedures For contract purchases, the card holder is to notate within the Pcard purchase sign-off in a comment box the contract number for future referenceFor contract purchases, the card holder is to notate within the Pcard purchase sign-off in a comment box the contract number for future reference Complete information on the use of the Pcard:Complete information on the use of the Pcard:

49 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 receivedThe 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 LineQuote / 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 approvedDocumentation 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 FIRM to be consideredReqs must be submitted by deadlines indicated in the FIRM to be considered

50 Purchase Requisitions (cont.) Quote / Contract Number in Comment Line Enter contract information here

51 Follow-up to Purchase Finishing off the Process…

52 Receiving Purchased Items Always notate on the shipping receipt if any external damage is found on the outside of the containerAlways 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 receivedVerify 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 requirementsCheck specifications within the PO / contract to ensure what was received meets the requirements Notify the supplier immediately if any damage is foundNotify the supplier immediately if any damage is found Review the invoice for contract price, discounts if applicable, freight if allowed, etc., before sign offReview the invoice for contract price, discounts if applicable, freight if allowed, etc., before sign off

53 Receiving when Services are being performed Be familiar with what the scope of service requires the vendor to performBe 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 workVerify 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 offWhen 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 processingUpdate software or paperwork upon completion of the order for payment processing

54 Questions?


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