1. Taking the Puzzle Out of Procurement or How To Do Business With Procurement and Materials Management

2. We will cover... Introduction - Who We Are Where to Find Purchasing Information Purchasing Lead Times Delegated Purchasing Tools Purchasing Ethics

3. We will Cover... Explanation of the Competitive Procurement Process Sole Source Procurement Procurement using Federal funds Minority, Small and Disadvantaged Vendor Programs

4. We Will Cover Procurement File Documentation Receiving and Shipping Procedures Contract Administration Disposal of Surplus Property

5. Procurement and Materials Management Blair Blankinship Director of Procurement and Materials Management Toni Wallington Assistant Director Nancy Wright Contract Specialist Lisa Edwards Property Control Dee McGhin Purchasing Card Administrator and Purchasing Assistant Wally Humphrey Receiving Specialist

6. Code 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

7. Code Of Ethics (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.

8. Procurement Administrative Lead Time 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

9. MISSION 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.

10. Where to Find Purchasing Information Procurement & Supply Home Page –www.ubalt.edu/procurement

11. DELEGATED PROCUREMENT The Purchasing Card Program –Allows authorized cardholders to make purchases up to $5,000. –Monthly purchase limit based on your needs. Page 7

12. Purchasing 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

13. 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 cards Page 8

14. P-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

15. Purchasing Card Abuse 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

16. How To Get 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)

17. Simplified Acquisition and Formal Procurement

18. Priority of Procurement 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

19. Classification 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

20. Simplified 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

21. Requisition for Purchase Create an electronic Requisition in PeopleSoft Three step approval process 1.Amount Approval in Department 2.Chartfield Approval in Finance 3.Budget Check by Requestor

22. Requisition Must Have Complete information –who, what, where, when, why Sufficient time for process –Give a realistic date for delivery - not ASAP

23. Request 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

24. Formal 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

25. Milestone Plan and Source 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

26. Milestones in the RFP Process 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

27. MBE 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.

28. The 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 Page 13

29. Publication of the Requirement Maryland Contract Weekly e-Maryland M@rketplace Others as necessary –Length of time before due date is now flexible

30. Pre-solicitation conference 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.

31. Evaluation 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

32. RFP Evaluation Evaluation committee reviews proposals identifies areas that need clarification May have oral presentation or demonstration if provided for in RFP

33. RFP Evaluation Committee writes narrative summary of proposal strengths and weaknesses Consensus evaluation

34. RFP Evaluation After technical evaluation has been completed review summary of price proposals from Procurement. Determine final ranking and justify best value decision.

35. Break

36. Sole Source Procurement 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

37. Sole Source Determination Procurement reviews justification. Performs independent research. Writes Sole Source Determination Approved by Director of Procurement

38. Sole 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

39. Sole Source Contract Procurement and Supply determines price reasonableness Procurement and Supply determines contractor responsibility –past performance –technical capabilities –financial stability

40. Special 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

41. Special Approvals Alcoholic Beverages - purchase of such beverages with University- controlled funds is not permitted except when purchased for resale.

42. Approvals 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.

43. Special 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

44. Special Approvals Radioactive And Hazardous Materials –approved by the Radiation Safety Officer, Environmental Safety

45. Special 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.

46. Special 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.

47. Special 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.

48. Consulting Agreements 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. Page 21

49. Consulting Agreements Cannot treat consultants as employees. To avoid conflict with IRS rules consult with Procurement and Supply or the President’s Office of Legal Affairs.

50. Furniture 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

51. State Use Industries Furniture 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!

52. Special 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.

53. Exemptions from Standard 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 Page 23

54. Exclusions 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

55. Procurements Funded by Federal Funds Page 25

56. Purchasing Rules Apply Regardless of Funding Source University Procurement Rules Apply to Grants and Contracts

57. A110 C.43 Competition Preferred Maximum extent practical Specification developer excluded Award to most advantageous and responsive offer –Price, quality, other written factors

58. Procurement and Supply 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

59. Solicitation Standards Clear description, no restrictive specifications Vendor requirements, evaluation factors Functional or performance specifications –Range or minimum

60. Solicitation Standards Specify salient characteristics of the item if using Brand Name or Equal Preferences –Metric Measurement –Environmentally friendly –Energy efficient –Recycled

61. Other Federal Concerns (Grant and Contract) Food US Flagged vessels and planes Restricted entities/governments http://www.arnet.gov/epls/ Federal provisions for purchase orders/contracts

62. Small Business Subcontracting Plans Set Goals for Awards To: Small businesses Disadvantaged firms Women owned business enterprises HUB-Zone firms HBCU and MI Veteran owned firms

63. Small Business Definition Service - Average Receipts NTE $2.5 - $21.5 Million Manufacturers - # Employees 500-1500 Supplies - less than 500 employees

64. Disadvantaged Firms Changed 10/11/99 Certification by Small Business Administration (SBA) required

65. Which Firms are Small, Women-Owned, 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

66. Report of Small Business Spending 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

67. Minority, Small and Disadvantaged Business Enterprise Program Page 27

68. Minority Business Enterprise Minority Business Enterprise (MBE) State socioeconomic program to support historically underutilized businesses. House Bill 306 - Maryland Law sets goals

69. Certification for MBE contractors 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

70. Minority Business Participation 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

71. Chancellor and President Mote support MBE program 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.

72. Review of Each Procurement 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.

73. Documentation of Procurement Files Page 30

74. Documentation 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.

75. Documentation 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

76. Documentation of P-Card 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.

77. Records of Large Transactions 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.

78. Receiving and Shipping Page 32

79. Goods Received by 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

80. Shipping Goods from Campus Get a “Return Authorization” from Contractor to whom you are shipping Insure outbound shipments Keep accurate records

81. Household 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)

82. Contract Administration Page 35

83. Contract Administration 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

84. Contract Administration Complex Procurement –Contract Kick-Off Meeting –Identification of Using Department Program Manager –Identification of Contractor Technical or Service Representative

85. Contract Administration Early and effective communication between all parties (including Procurement) Detailed documentation of performance –Good or Bad!

86. Disposal of Surplus Property Property Control Located in the Academic Center Contact Lisa Edwards (X5242) for assistance

87. We Discussed… We Discussed… Key Purchasing Principles Where to Find Purchasing Information Purchasing Processes, Procedures, Lead Times Purchasing Restrictions Federal Subcontract Plans & Reports

88. Questions Blair Blankinship, Director of Procurement and Material Management bblankin@ubalt.edu 410-837-5714