2 ProcurementRecipients of CDBG funds are responsible for ensuring that goods and services are procured competitively and in accordance with established procurement rules and regulations.Local procurement policies should describe how the recipient will procure supplies, materials, services and equipment.
3 ProcurementThe policy should assure that all purchases are handled fairly and in a manner that encourages full and open competition.Recipients should follow the procedures established in the policy and document how all procurements were handled.Documentation of the procurement process will show that the recipient obtained high quality goods and services at the lowest possible price through an open, competitive process.
4 Procurement and Conflict of Interest Policies Must have a written procurement policyCDBG or local procurement policyCan adopt CDBG policy to apply only to the CDBGfunded projectAdopt written procedures to handle and resolve procurement disputesMust have a written conflict of interest policy
5 Conflict of Interest Prohibited conflicts: Person with CDBG responsibilities, decision-making power or information may NOT:- obtain a financial interest or benefit from CDBG activity- have an interest in contract or subcontractGrant Administrator cannot help grantee with the procurement of grant administration if they intend to submit proposal
6 Four Kinds of Procurement Small PurchasesNon-competitive ProposalsCompetitive ProposalsCompetitiveSealed Bid
7 Small PurchasesFormal bid solicitation is not required for purchases under $25,000Price or rate quotations shall be obtained from an adequate number of qualified sources
8 Noncompetitive Proposals This method may be used only under VERY limited circumstances.Grantee should consult state CDBG staff before utilizing this methodThe item/service is available only from a single sourceState may authorize the method in the event of a public emergencyAfter solicitation of a number of sources, competition is determined inadequate. (fewer than 3 bids)- submit list of solicited firms- submit copy of RFP/RFQ or invitation to bid- submit response (s)- rating/ranking sheets
9 Competitive Proposals Typically used in the selection of professional service providersTwo types:Request for Proposal (RFP) – cost is a factorRequest for Qualifications (RFQ) – cost is not a factor in the procurement of engineering and architect servicesCDBG funds may not be used to pay for any preliminary engineering or grant writing services
10 Competitive Proposal - RFP Document Procurement Process for project fileGrantee must send request, receive responses and complete the evaluationRequests for proposals will be publicized and identify all evaluation factors and their relative importanceGrantee must honor reasonable requests for an opportunity to compete
11 Competitive Proposals - RFP Proposals must be solicited from an adequate number of qualified sourcesMaintain a list of Professional Service ProvidersMaintain a list of MBE/WBE firms for construction, engineering and other professional servicesGrantee must conduct a technical evaluation of the submitted proposals
12 Competitive Proposals - RFP Awards will be made to the most responsive and responsible bidder – must clearly be the most advantageous source of the services – based on price and other factorsUnsuccessful bidders must be notified in writing
13 Competitive Proposal - RFQ For procurement of architecture or engineering services Request for Qualification (RFQ) may be used.Most qualified competitor is selected based on evaluation of qualificationsPrice is not used as a selection factorThis approach may be used only to purchase architectural and engineering services
14 Competitive Sealed Bid Typically used in the procurement of construction contractsAward is based on fixed bid price (lump sum or unit price) – “cost plus” contracts prohibitedContract is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (lowest responsive and responsible bidder)
15 Invitation for Bid Must clearly identify all bidding requirements 10-hour training requirement for all contractor employees working on public worksE-Verify –is necessary for all contracts paid with CDBG fundsObtain applicable Federal wage rates from DED.Addendum cannot be issued after 72 hours prior tothe bid opening.If providing sales tax number to contractors and subcontractors, Section of the State Statutes, advertise in a manner that all bidders are aware that the sales tax saving method is being used.
16 Invitation for BidMaintain written records for each procurement action sufficient to detail the significant history of the transactionContracts over $25,000 may be formally advertised once a week for a minimum of three weeks (21 days) prior to the bid openingInternet advertisement - 21 days – must ensure that bidders are informed that internet is being used in lieu of newspaper advertisement
17 Invitation for BidContracts cannot be divided to keep them under $25,000Alternates may be requested in the bid processBid documents must specify the order in which alternates will be applied in determining the low bidAlternates must be used in the order they are writtenSubmit to our office documentation of advertisement for bids and affidavit of publication
18 Bid Opening & Preselecting Award of Contract All bids and proposals opened and read in a public meetingOfficials will keep minutes all bid openingsCheck references and use evaluation formReview all Bids. Determine if bids are legally and technically responsiveProcess for selecting other than the low bidder.Must be lump sum or unit price bids. Unit price determines lump sum.May not Negotiate with bidderAny or all bids may be rejected if there is a sound documented reason.
19 Bid Opening & Preselecting Award of Contract Grantee will hold a public meeting to make their decision and selection.Official minutes contract award will be kept in grant filesNeed approval from DED if less than three responses are received prior to awarding a contractRequest to DED for approval to come from the grantee/sub-granteeNotify all unsuccessful bidders in writing
20 Prior to Award of Construction Contract Verify that contractor is not on the listing of debarred contractorsRequest DED to verify that the contractor has a certificate in good standing with the Secretary of StateRequest DED to verify that contractor’s bonding company is on the Department of Treasury’s listing of approved suretiesProvide in writing the correct names and spelling of each
21 Change OrdersIt is prohibited to change order out items while in the process of awarding the contractThis method of contracting will be considered negotiation and CDBG funds cannot be used to pay for the construction
22 The “essence of good procurement” can be summarized as follows: Identify and clearly specify standards for the desired goods or servicesSeek competitive offers to obtain the best possible quality at the best possible priceUse a written agreement that clearly states the responsibilities of each partyKeep good records