Presentation on theme: "Capital Equipment Workshop"— Presentation transcript:
1Capital Equipment Workshop Capital Equipment WorkshopFY 2015December 2014
2Capital Equipment Overview – City Requirements Equipment Projects funded by the City are primarily governed by:NYC Comptroller's Accounting Directive 10NYS Local Finance LawChapter 13 of the City CharterNYC Procurement Policy Board RulesAs such,Equipment must be used for an organization’s public purpose for at least 5 years or more depending on its estimated useful lifeEquipment must be capitally eligibleEquipment cost should be fair and reasonableEquipment is the property of the City of New York (most cases), or the City retains an interest in the equipment.22
3Capital Equipment Overview – City Requirements Funding allocation does not guarantee:All equipment requested will be deemed capitally eligibleRequired approvals by government entities will be grantedProject will occur according to your anticipated timelineDoes everyone understand what a capital asset is?Playwrights Horizons Lighting EquipmentFUNDS ARE NOT SAFEFROM BUDGET CUTS
4Capital Equipment Overview – Organization Responsibilities Organization agrees to:Comply with City requirementsRespond to City requests for information in a timely mannerAssume responsibility of insurance, maintenance, security, and operation of equipmentReport annually to DCLA on condition of equipmentNotify the City in advance and receive approval when replacing, disposing, or removing equipmentRelinquish equipment back to City if equipment is no longer in useDoes everyone understand what a capital asset is?
5Certificate to Proceed Annual Certification and Final Disposal Capital Equipment Process OverviewStage 1Stage 2Stage 3Certificate to ProceedProcurementAnnual Certification and Final DisposalScope DevelopmentProcurement MethodManaging AgenciesPurchase and DeliveryDCLADCASEDC5
6Stage 1: Scope Development – Equipment Systems Equipment purchasing process begins with compiling a capitally eligible list of equipment and specifications:Equipment SystemsEach system must be composed of mutually dependent and physically or wirelessly* connected elements that are integral to the system’s functionEach system must be at least $35K and have a minimum useful life of at least 5 yearsSecurity systems, compact shelving, and similar non-moveable equipment in non-City owned facilities must meet a minimum cost of $250KMention Directive 10Refer to list that will be handed out*Connected through a wireless network
7Stage 1: Scope Development – Eligible Equipment Audio VisualInformation TechnologySeating SystemSoundVehicles and Heavy EquipmentTelephone SystemTheatrical LightingMention Directive 10Refer to list that will be handed outSoho Repertory Theatre Seating77
8Stage 1: Scope Development – Ineligible Equipment TrainingMaintenance, service, extended warranty feesLaptops, tablets, smartphones, and handheld devicesSystem components not integral to the operation of the equipment, such as carrying casesSoftware (other than operating systems)HVAC or Chiller EquipmentElevators and chair liftsSpare or consumable items (batteries, lamps, gels, etc.)8
9Brand Specific or Equal Stage 1: Scope Development – Exhibit A Equipment ListOrganization prepares an equipment list detailing the requested equipment:ItemBrand Specific or EqualQtyDescriptionManufacturerModel/Part #ColorTechnical SpecsUnit CostTotal Cost110Lightolier Lighting FixtureAltmanIQ38C-W-L-EDSN-IQ38WhiteLamp type : CDM PAR38, PAR30 — Wattages : 39, 70. &100 — Voltages : 120, 240, & 277 — Avg. lamp hours : 10,000 — Dimensions (in) : W x 10.5 H x D — Dimensions (cm) : 156 W x 268 H x 129 D — Weight : 5 lb / 2.3 kg $450 $4500234The spec includes line items in spreadsheet form, with:Description of item and salient characteristicsBrand NameModel NumberQuantity, Unit Cost, Total Price
10Stage 1: Scope Development – Brand Specific or Equal Equipment list should indicate whether an item is “Brand Specific or Equal”“Brand Specific or Equal” allows vendors to substitute equivalent itemsby other manufacturersMajority of City purchased items are made as “Brand Specific or Equal”BRAND SPECIFIC ITEMS REQUIRE A LENGTHY DETERMINATION PROCESS AND MAY NOT BE APPROVED
11Stage 1: Scope Development – OMB Questionnaire Organization prepares answers to the form’s questions, including:How does the system work?Who will use the system (staff, the public, visiting artists, etc)?Describe the system and how it relates to your mission.How does each part or group of parts relate to the system? Why are these parts necessary for the system to function?Is the system, as a whole or in part, attached to real property?Will this equipment reside on city property? If not, when does the lease expire?Who will be responsible for the care of the system and for what period of time?Are there any implications this project will have on your operating budget? For example, will more staff need to be hired?The spec includes line items in spreadsheet form, with:Description of item and salient characteristicsBrand NameModel NumberQuantity, Unit Cost, Total Price
12Stage 1: Issuance of Certificate to Proceed Certificate to Proceed (CP) gives the managing agency spending authorityDCLA sends CP request to Office of Management and Budget (OMB) for reviewDocuments required from organization for CP request:Exhibit A equipment listOMB QuestionnaireOrganization and project narrative(s)Vendor quote(s)Legal documentation (Capital Equipment Letter Agreement or Funding Agreement)Lease (with term of at least 5 years from the purchase of the equipment)Useful life statement
13Stage 1: Issuance of Certificate to Proceed OMB will review CP request for equipment for:Capital eligibilitySystem justification and cost estimateLegal agreements: use agreement or security agreementGhetto Film School post-production editing equipment
14Stage 1: Determination of Procurement Method All City procurements must use one of the methods authorized by the City’s Procurement Policy Board (PPB Rules)DCLA determines the procurement method based on several factors, including but not limited to:Type of equipmentCost of systemSource of fundingOrganizational capacityProcurement method and cost of system determines the agency that will manage the project (DCLA, DCAS, or EDC)Note that some equipment is required to be purchased via requirements contract
15Stage 2: Procurement – DCLA Managed <$100K Standard Small Purchase Process:DCLA procures the equipment for organization’s useEquipment system must be <$100KEach equipment system is bid and purchased separatelyProcurement may be either:Competitive BidPurchase from a City or State requirement contractEquipment will be City-ownedI will be procuring for most projects. David Francis handles IT purchases.If org has more than one EQ project, threshold applies per system (not for the total cost of both systems)1515
16Stage 2: Procurement – DCLA Managed <$100K Standard Small Purchase Process :Vendors are randomly selected from the City vendor listOrganization’s previous relationship with vendors has no bearing on theoutcome of the procurementDCLA will award contract to the lowest responsive and responsiblebidderContracts require registration by the Comptroller (30 days)Once registered, DCLA issues purchase order to the vendorYou cannot ask to add favorite vendors to the list. However, you can encourage vendors to enroll with the City.
17Stage 2: Project Schedule - DCLA Managed <$100K Best case scenario. Average time: 2 years
18Stage 2: Procurement – DCLA Managed FA DCLA Discretionary Purchase through a Funding Agreement (FA):Used only for certain projects funded by Borough President and/or City Council; DCLA will determine whether this method will be usedAll vehicles are purchased through a Funding AgreementOrganization is responsible for bidding and procurement of the equipment (including vendor payment) per the terms of the FAExtensive legal documentation is required (Funding Agreement, Security Agreement, lien search and UCC financing statement, legal opinion, etc.)Organization receives City funding on a reimbursement basis after vendors are paid and requisitions submitted to DCLAMost purchases are not FAs.
19Stage 2: Procurement – DCLA Managed FA >$100K Procurements >$100K will also require:Public HearingVENDEXCompliance with Executive Order No. 50 (EEO)Requires City contractors to comply with federal, state, and local equal employment opportunity (EEO) laws and regulationsTimeline varies tremendously according to organization. Can take longer than a small purchase, can be faster.1919
20Stage 2: Procurement – DCAS Managed >$100K Department of Citywide Administrative Services (DCAS) Competitive Sealed Bid Process, two stage process:1st Stage: DCLAObtains CP (Certificate to Proceed)Determines procurement method and prepares documentsSubmits equipment package to DCAS2nd Stage: DCASPublicly advertises invitation to bid for not less than 15 daysAwards to lowest responsive and responsible bidder
22Stage 2: Procurement – EDC Managed Economic Development Corporation (EDC) Capital Equipment Procurements:EDC manages certain capital equipment procurements through a Funding AgreementDCLA works with organization to develop scope of projectDCLA submits equipment package to EDC to reviewEDC obtains CP (Certificate to Proceed)Organization receives City funding on a reimbursement basis after vendors are paid and requisitions submitted to EDC(see
24Stage 2: Purchase and Delivery Upon delivery, open and check all equipment ASAPReport any damaged or faulty equipment to vendor and City project managerFor DCLA and DCAS standard procurements, return Equipment Receipt & Notification Form to DCLA along with packing slipsFor Funding Agreements, submit payment requisitions to the managingagency with packing slips, invoices, and proof of paymentVerify items are as ordered and not damaged.Any issues with non working EQ must be handled in a timely mannerHarlem School of the Arts Pianos
25Stage 3: Annual Certification of Use by Organization Annually certify use of equipment to DCLA for a minimum of 5 Years:Equipment has been used in accordance with the terms and conditions of the Capital Equipment Letter Agreement or Funding Agreement, as applicableEquipment has not been destroyed, replaced, disposed of or removed to another location (except removal as necessary for maintenance or repair) without the City’s consentEquipment has been used and maintained in a responsible and lawful manner by the Organization for its City Purpose or such other purpose approved by the City, and not for personal, family or household useEquipment has not been damaged or destroyed, lost or stolen, in whole or in part by fire or other casualty without immediate notification to the CityEquipment has not become subject to any lease, lien, mortgage, assignment, interest or other encumbranceReminder: All EQ is city owned, unless it is a FA (though in that case the City will still retain an interest in it).
26Stage 3: Final Disposal of Equipment Contact Sei Young Kim, Capital Equipment Manager, for information as to the proper disposal of equipment after the end of its useful lifeRequest DCLA consent to destroy, replace, dispose of, or remove equipmentFor any eligible electronic equipment: City coordinates disposal using the City’s Safe Handling of Waste vendor
27Next Steps Schedule meeting with project manager Submit scope of work Compile documents for CP packageRespond quickly to all questions & requestsLower East Side Tenement Museum Interactive Multimedia System
28Abbreviations CP Certificate to Proceed DCAS Dept. of Citywide Administrative ServicesDCLA Dept. of Cultural AffairsDDC Dept. of Design and ConstructionDLS Division of Labor Services (unit of SBS)DMSS Division of Municipal Supply Services (unit of DCAS)DOI Dept. of InvestigationEDC Economic Development CorporationEEO Equal Employment OpportunityEPP Environmentally Preferable PurchasingFA Funding AgreementFMS Financial Management SystemMOCS Mayors Office of Contract ServicesMWBE Minority and Women’s Business EnterpriseNYS OGS NYS Office of General ServicesOMB Office of Management and BudgetPPB NYC Procurement Policy BoardSBS Dept. of Small Business ServicesVENDEX Database of vendor/contract management info
29DCLA Equipment Contacts Capital UnitCarolyn SarkisProject Manager(212)ACCOLouise WoehrleAgency Chief Contracting Officer(212)Sei Young KimCapital Equipment ManagerDeputy ACCO(212)FinancePhillippa ShaoDirector of Finance(212)David FrancisStaff Analyst(212)Tonia McCaskill-JohnsonAccounts Payable(212)LegalKristin M. SakodaDeputy General Counsel(212)Ebonie HazleStaff Attorney(212)