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Purchasing Goods and Trade Services

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1 Purchasing Goods and Trade Services
Developed by ODOT Procurement Office Procurement 201 Purchasing Goods and Trade Services Welcome everyone! Instructor Introductions. [Student introductions later] Mary Wandell Nov Office of Project Delivery 1 year – Office Specialist 2 Alternative Delivery Program Coordinator 5 months – Program Technician 2 2 years – Procurement & Contract Specialist March 2004 – ODOT Procurement Office 2 years - Procurement & Contract Specialist 4 years - Procurement Training Coordinator (Since April 2008)

2 Housekeeping Safety Information Facilities Breaks Accommodation
Handout packet

3 Please… Mute your Cell Phones

4 Training Objectives After completion of this training, participants will be able to: Identify the roles and responsibilities for local procurement of Goods and Trade Services up to $100,000 Describe the Small Procurement process Practice procuring Goods and Trade Services using the ‘3 Quote’ process Apply Contract Administration practices to both simple and complex purchases of Goods and Trade Services Use the Oregon Procurement Information Network (ORPIN) to find existing Price Agreements Go through training objectives quickly.

5 Agenda Contracting Basics Soliciting in the Open Market
Small Procurement Intermediate Procurement Purchase Orders Procurements over $100,000 Contract Administration Resources This training will focus on requirements, process and tools for procuring goods and trade services.

6 Introductions Your name Where you work What you purchase

7 Contracting Basics Section 1 Procurement 201
Review from Procurement 101 – Procurement 201 Purchasing Goods and Trade Services

8 First Steps to Procurement
Purchasing Authority The “Buy Decision” The Decision To Purchase Define the Need Procurement Potential First Steps of making a purchase… Ask Group: What’s the suggested order of steps to take before you start contacting vendors in the open market? Group consensus on the order? Progress quickly to slide 13 to fill out the chart. Open Market Conducting purchase through an open solicitation process

9 First Steps to Procurement
Purchasing Authority The “Buy Decision” The Decision To Purchase Define the Need Procurement Potential Click Open Market Conducting purchase through an open solicitation process

10 First Steps to Procurement
Purchasing Authority Define the Need The “Buy Decision” The Decision To Purchase Procurement Potential Click Open Market Conducting purchase through an open solicitation process

11 First Steps to Procurement
Purchasing Authority Define the Need The “Buy Decision” The Decision To Purchase Procurement Potential Click Open Market Conducting purchase through an open solicitation process

12 First Steps to Procurement
Define the Need The “Buy Decision” The Decision To Purchase Purchasing Authority Procurement Potential Click Open Market Conducting purchase through an open solicitation process

13 First Steps to Procurement
Define the Need Defining a business need in terms of goods and/or services to meet the need The Decision To Purchase Determining if the potential purchase fits the mission, goals and budgetary constraints Purchasing Authority Finalizing the authority to commit funds and conduct a procurement The “Buy Decision” Buying via socio-economic programs and agreements before using open market Procurement Potential Open Market Conducting purchase through an open solicitation process

14 Getting Started Define the need Estimate the total cost of purchase
Assess options; does it require purchasing something or hiring a contractor to do work? Estimate the total cost of purchase Confirm funds are authorized for the purchase Determine who has authority to conduct the purchasing process Define clear and specific requirements If you don’t ask for it, you won’t get it! Define need What’s the problem to solve? What’s the proposed solution? What do we already have? What do we need to obtain? Estimating cost Funding approval Threshold for authority to procure Clear and specific requirements Ask or you won’t receive

15 Estimated Total Cost Estimated total cost is based on the total cost of contract if amended to it’s maximum limit Estimated cost for initial contract Plus estimated cost for annual renewals or additional projected work Total cost is for the whole project and the anticipated duration. Equals estimated total cost

16 Requirements for Goods
Defining product specifications Product features and characteristics Brand name requirement (more on next slide) Resources for product specifications and standards ODOT Qualified Products List (QPL) Established ODOT standards Product catalogs and brochures Internet research Developing ODOT’s requirements for Goods

17 Brand Name Specifications
Requires written determination that it meets at least one of the following: unlikely to encourage favoritism or substantially diminish competition; would result in substantial cost savings; only one manufacturer or seller for the quality, performance or functionality required; or requires purchase of goods or services compatible with existing goods. Keep written determination in file Document how the purchase meets at least one of the criteria Discussion of criteria No Favoritism; does not limit competition – all vendors contacted sell that brand Results in substantial cost savings – Cost less than other brands to purchase or operate Falls under same maintenance and support agreement as other owned equipment Quality, performance, functionality - The only brand that includes required features The only brand that meets durability standards Compatibility – Software compatibility for transfer of data Interchangeable parts for maintenance and repair Interchangeable accessories for operation Additional training not required for operation DAS Rules – Under DAS Delegation, OPO can approve Brand Name for purchases over $150,000 up to $5 million.

18 Brand Name or Equal Can specify brand name “or equal” to establish standard of quality, performance, functionality and other characteristics required Does not require written determination Does not have to meet required criteria Must accept bids for products that meet mandatory specifications, regardless of brand name More common is to specify a brand name “or equal” This establishes required standards of quality and functionality

19 Requirements for Goods
Examples of other requirements Warranty requirements Maintenance and support requirements Delivery requirements FOB Destination vs. FOB Origin Delivery locations and timelines Include cost of shipping and handling in bid price Insurance requirements (more on next slide) Delivery Requirements FOB – “Freight On Board” or “Free On Board” FOB Destination preferred; Shipper pays shipping; responsible for damage until ODOT receives In solicitation, specify bid must include all shipping and handling charges.

20 Insurance for Goods If vendor delivers goods, require: Recommended:
Workers’ Compensation for vendors with more than 1 employee Automobile Liability covers bodily injury or property damage associated with vendor’s automobile Recommended: Commercial General Liability covers bodily injury and property damage caused by vendor or product purchased from vendor Recommendations from Ron Bennett, who was ODOT’s Contract Risk & Insurance Consultant When vendor employee will deliver Goods to ODOT, require: Workers’ Comp Commercial General Liability Automobile Liability Covers any bodily injury or property damage that occurs during delivery of product. Ron recommends always requiring Commercial General Liability Even when ordering product by phone and product is shipped to ODOT by commercial carrier (USPS, UPS, commercial shipper, etc.)

21 Insurance for Goods If purchasing a vehicle, also consider:
Garagekeepers’ Legal Liability covers damage to vehicle occurring at vendor’s facility when left for service, repair, storage or safekeeping When purchasing a vehicle, consider Garagekeepers’ Legal Liability Purchase vehicle at dealership – dealership burns down and ODOT’s vehicle is destroyed. Covers value of vehicle.

22 Requirements for Goods
Specify each requirement as Mandatory or Desirable Mandatory Must reject bid if any mandatory not met Cost is included in bid total for low bid determination Desirable Not required, but adds value Cost generally not included in bid total for low bid determination If not included in bid total, cost can be negotiated Mandatory specifications (what you must have) Desirable specifications (what would also be nice to have)

23 Requirements for Goods
Invite vendors to offer additional features or accessories Price of these not included in bid total for low bid determination Cost of these can be negotiated Ask for other related features or accessories vendor offers

24 Sustainability - Buying Green
City of Portland Energy Efficient Energy Star logo / website at Recycled Content Post-consumer content is best EPA website: Non-Toxic Be wary of products labeled non-toxic without reference to certification or other details. Minimal & Recyclable Packaging Buy Local, Buy MWESB To include more “green” specifications… City of Portland website is a good resource for information Includes: “green” specifications for some purchases Links to other websites DAS – Greg Hopkins

25 Requirements for Services
Options for defining requirements for Services Describe the situation and ODOT’s requirements for the final outcome - contractor determines how to get it done Use a Statement of Work that includes: Tasks - description of work to be done Deliverables - tangible, measurable outcomes of the work Schedule – date each Deliverable must be completed Requirements for outcome; contractor determines how Examples: HVAC repair at DMV facilities Paint outside of buildings E and K at Region 2 complex Vegetation management (weed whacking) along Hwy 42 Statement of Work specifies tasks, deliverables and schedule Example: Deliver training to ODOT staff Task 1 – Copy handouts; compile into packets (packets due 2 days before class) Task 2 - Provide class instruction according to prepared curriculum (instruction completed as scheduled) Task 3 - Distribute training evaluations; collect responses and compile into a report (training evaluation report due 2 days after class)

26 Requirements for Services
Examples of other requirements Safety standards Certifications or licenses Specifications for materials to be used Insurance coverage (more on next slide) Other things to think about when procuring services:

27 Insurance for Services
Always require: Commercial General Liability covers bodily injury and property damage caused by vendor or product purchased from vendor Workers’ Compensation for vendors with more than 1 employee If services require operation of vehicle, require: Automobile Liability covers bodily injury or property damage associated with vendor’s automobile Recommendations from Ron Bennett who was ODOT’s Contract Risk & Insurance Consultant Always require Commercial General Liability and Workers’ Comp, If services include operating a vehicle, also require Automobile Liability Covers any bodily injury or property damage that occurs if there is an accident

28 Insurance for Services
If service for ODOT vehicle, consider: Garagekeepers’ Legal Liability covers damage to vehicle occurring at vendor’s facility when left for service, repair, storage or safekeeping If there’s risk of pollution, consider: Pollution Liability covers bodily injury, property damage and environmental damage caused by vendor in a sudden accidental occurrence (can include gradual accidental occurrence) When services are to repair or modify a vehicle, consider Garagekeepers’ Legal Liability Vehicle left at dealership for repair – dealership burns down and ODOT’s vehicle is destroyed. Coverage for value of vehicle. Pollution Liability Consider when contractor will be removing, hauling, storing, or disposing of hazardous materials. Adds to the cost of the contract. May be difficult for small firms to get this coverage at a reasonable cost. What pollution could occur… what is the likelihood?

29 The “Buy Decision” Consider Buy Decision sources in priority order:
Surplus Property Qualified Rehabilitation Facilities Inmate Labor DAS Statewide Price Agreement NOTE: ORS 190 Agreements such as Intergovernmental & Tribal Agreements may be used at any time in the process Open Market If Buy Decision sources do not meet your needs, the purchase may be made in the open market May go through Buy Decision sources with idea of what’s needed and evaluate what they offer. DAS Rule requires consideration in priority order: Surplus – use what State has already purchased QRF – use public funds to support disabled people Inmate Labor – use labor resources that public funds already support Statewide PA – discounts and advantages for volume purchases IGA – using other public resources to meet the need

30 The “Buy Decision” Required to purchase from a “Buy Decision” source, if it meets ODOT’s needs. Often quicker process than Open Market solicitations No limit to quantities or cost of purchase If Buy Decision doesn’t meet our need, we develop clear specifications before contacting vendors in the Open Market

31 How to Find Buy Decision Sources
Surplus ODOT Surplus or website DAS website Qualified Rehabilitation Facility (QRF) DAS website includes lists of QRF providers for Goods or Services Inmate Labor Websites for Oregon Corrections Enterprises or Oregon Dept of Corrections Inmate Work Activities Handout: Helpful Websites and Links Ask someone to name a good and a service they purchase Do an online demo of each site to look for them Handout

32 How to Find Buy Decision Sources
DAS Price Agreements OPO website for list of Price Agreements Call Debbie Janke at (503) Oregon Procurement Information Network (ORPIN) Call DAS Hotline at (503) , Option 2 Handout: ORPIN Step-by-Step Guide Generally easier to find PA on ORPIN when you have the PA number OPO has searchable list Call DAS hotline – they can tell you if there is a price agreement for item you are procuring. Handout

33 Getting Access to ORPIN
To obtain “state employee” access to ORPIN Debbie Janke, subject line "ORPIN Access" Include your preferred “user name” 6 characters or more alpha or numeric characters only case-sensitive For assistance with ORPIN Contact Debbie Janke at (503) or by State employee access download documents post solicitation and award on ORPIN Contact Debbie Janke for access

34 ORPIN Training DAS provides hands-on classes:
ORPIN Full System Training ORPIN: Just the Basics iLearnOregon at https://iLearn.oregon.gov Check class dates and times Register for training DAS offers excellent training on ORPIN Register on iLearn (State system)

35 DAS Price Agreements Intended to provide cost effective pricing for common goods and services Prices in the Price Agreement are the maximum limits ODOT can request lower prices Designated as either Mandatory or Convenience Mandatory – Must use, with some exceptions Convenience – May use Mandatory Price Agreements - Required to purchase from these If goods or services meet our need PA may list exceptions when not required to purchase When there are multiple mandatory PA for the same item, choose the one that best fits your needs Examples of Mandatory Price Agreements Office supplies Computer hardware Tires Fuel Convenience PA typically put in place to meet needs of specific agency or project - ODOT not required to purchase from these

36 ODOT Price Agreements ODOT also has Price Agreements Asphalt
Emulsions and Recycling Agents Deicer, Magnesium Chloride ODOT also has Price Agreements.

37 Fleet Equipment Purchases
Before contacting vendors, contact Fleet Operations to verify if there is a price agreement Refer to “Fleet Equipment Purchase Process” handout for more information If you have questions or need assistance, contact Stacie Olano at (503) Handout: Fleet Equipment Purchase Process New guidelines – will be posted on Fleet’s Intranet site. Handout

38 Process Map - Bid, Award, Pay
That covers initial steps If Buy Decision meets need, purchase from source. If Buy Decision doesn’t meet needs, go to Open Market.

39 Soliciting in the Open Market
Section 2 Procurement 201 Purchasing Goods and Trade Services

40 Process Map - Bid, Award, Pay
Open Market procurements go through Bid – Award process. Complexity of process changes based on several factors: Total estimated cost Risk and complexity of purchase Solicitation method

41 State of Oregon Procurement Policy
ORS 279A.015 A sound and responsive public contracting system should: Instill public confidence through ethical and fair dealing, honesty and good faith on the part of government officials Allow impartial and open competition, protecting both the integrity of the public contracting process and the competitive nature of public procurement Taxpayers and businesses are very interested in how we manage procurements. State of Oregon procurement policy in ORS 279 states: Public confidence through ethical and fair dealing, Don't engage in unethical or unfair business practices Don't create perception of unethical or unfair ADOT article Impartial and open competition 3 quote process, ITBs and RFPs. Don’t unnecessarily limit competition for ODOT contracts Former FAA article

42 State of Oregon Procurement Policy
ORS 279A.015 (continued) A sound and responsive public contracting system should: Promote efficient use of government resources, maximizing the economic investment in public contracting within this state. Clearly identify rules and policies that implement each of the legislatively mandated socioeconomic programs that overlay public contracting and accompany the expenditure of public funds. Efficient use of government resources – Surplus Inmate labor DAS Price Agreements ORS 190 Agreements Legislatively mandated socioeconomic programs MWESB notification requirements Qualified Rehabilitation Facilities (QRF) ESB program

43 Ethical Considerations
Public employees are held to high standards of conduct Government Ethics (ORS 244) Staff declare potential or actual conflicts of interest; Agency reassigns to staff with no conflict of interest No unfair gain from public employment Potential COI Could be direct benefit - Creates perception of unfair advantage Actual Conflict of Interest Would be direct benefit - Giving unfair advantage to relative or business Selecting relative’s business in vendor selection process; unfair competition. Instead, declare as actual or potential conflict of interest. Giving information to relative that is not available to other bidders; unfair advantage. Instead, refer them to point of contact. If you are the point of contact, notify your supervisor of the potential conflict. They may need to reassign the solicitation. Conduct solicitation that includes vendor you used to work for. Refer to ODOT Code of Conduct policy. Consult with OPO. COI - Region 4 Baggett Article No unfair gain Stone Cole Corruption Gift certificates, points, bonuses and kick-backs for personal benefit.

44 Ethical Considerations
Maintain public trust Promote impartial and open competition Maintain a fair and level playing field Be good stewards of taxpayers money Protect best interests of the State Promote impartial and open competition Do 3 quote in La Grande for purchases under $5,000 Request quotes from more than 3 vendors for Intermediate Procurement Don’t fragment purchases Don’t create unnecessarily restrictive specifications Maintain a fair and level playing field Give all potential bidders the same information Don’t play favorites Be good stewards of taxpayers money Do low bid when most efficient; otherwise best interest of state gives you more flexibility Ask for what ODOT needs Protect best interests of the State Assess risks to ODOT or the public Manage the risks appropriately

45 Procurement Authority & Thresholds
Formal Procurement Above $5 million DAS Authority Above $5 million DAS Authority DAS Procurement Formal Procurement Above $150,000 Procurement OPO Intermediate Procurement $100, to $150,000 $100, to $150,000 Personal Services Public Improvements Intermediate Procurement Exceptions Procurement Local $5, to $100,000 $5, to $100,000 Significance to you Low dollar purchases Fewer requirements Simplified procurement process Fewer involved in the process You have more control over how quickly you can complete the purchase Higher dollar purchases More requirements More complexity in the procurement process Others involved in the process Takes more time to complete the purchase UPDATE NOT REFLECTED IN CHART OPO now has authority to conduct solicitations under DAS authority up to $5 million; IT Purchases ITPAM Small Procurement Up to $5,000 Up to $5,000 TGM Projects TGM

46 High Complexity–High Risk Purchases
Personal Services Completed by OPO A&E and Related Services under ORS 279C; non-A&E under ORS 279B Public Improvements (Public Works) Some under ORS 279C; others under ORS 279B BOLI or Davis-Bacon prevailing wage requirements Bond requirements ODOT required to pay fee to BOLI for Public Works over $50,000 Personal Services and Public Improvements – many requirements and complexities Personal Services: OPO does most DAS does some

47 High Complexity–High Risk Purchases
IT Related Purchases Completed by ITPAM Purchases must meet ODOT’s standard specifications Purchases require ODOT’s Chief Information Officer approval Goods & Trades over $100,000 Completed by OPO Solicitation requirements become more complex Large contract amounts generally have more risk Aggressive competition for contracts; more protests IT Related Purchases ITPAM OPO DAS GTS over $100,000

48 Complexity & Risk Matrix
Low Complexity & Risk High Complexity Increasing Risk Complexity Complexity and Risk impact communication, process, and contract type verbal vs. written solicitation simple informal solicitation vs. more formal solicitation direct selection vs. competitive process purchase order vs. contract Complexity Complexity and risk of your purchase impacts: Communication with vendors Level of detail to provide vendors Criteria used to select vendor Contract document Risk

49 Complexity & Risk Matrix
Low Complexity & Risk High Complexity Increasing Risk Complexity Determine Complexity based on factors such as: Product sophistication Federal and state requirements Services generally considered complex Complexity Assessing complexity Which is generally more complex: Buying a hammer or buying land surveying equipment? Buying a new engine for a specific vehicle (Part number) or buying a new vehicle? Services to repair a broken faucet or services to replace HVAC and ductwork in an old building? Public Works under $50,000 or Public Works over $50,000 (bonding & prevailing wage)? Risk

50 Complexity & Risk Matrix
Low Complexity & Risk High Complexity Increasing Risk Complexity Determine Risk based on assessment of: What could go wrong? Likelihood of occurrence? What kind of harm or loss? How can the risk be managed? Complexity Assessing risk Which generally has a higher level of risk: Buying same GPS unit that ODOT already uses or buying innovative new type of GPS unit? Obtaining landscape maintenance services for office location or having contractor replace carpeting in DMV office? (confidential records and information on desktops) Purchase and installation of park bench at highway rest area or tree removal along a section of highway? Risk

51 Evaluating Complexity and Risk
Washing outside of T-Bldg windows Complexity Product sophistication Types of services Federal and state requirements Risk What could go wrong? Likelihood of occurrence? What kind of harm or loss? How can the risk be managed? Group Discussion Phone quote or written solicitation?

52 Evaluating Complexity and Risk
Buying or leasing a specialized copier (not on DAS Statewide Price Agreement) Complexity Product sophistication Types of services Federal and state requirements Risk What could go wrong? Likelihood of occurrence? What kind of harm or loss? How can the risk be managed? Group Discussion Phone quote or written solicitation?

53 Evaluating Complexity and Risk
Seats for One Ford F550 Truck (Part number L45879A2) Complexity Product sophistication Types of services Federal & state requirements Risk What could go wrong? Likelihood of occurrence? What kind of harm or loss? How can the risk be managed? Discussion Phone quote or written solicitation?

54 Small Procurement Section 3 Procurement 201
Handout: Procurement Decision Flow Chart Getting Started Defining the Need Procurements regions don’t have authority to procure Buy Decision Consider the sources If they meet need, use them. If they don’t meet need, go to Open Market Proceed to Open Market Chart shows only procurements for Goods and Trade Services (including Public Works) Procurement 201 Purchasing Goods and Trade Services

55 Small Procurement ORS 279B.065
Any procurement of goods or services not exceeding $5,000 A Small Procurement may be awarded in any manner deemed practical or convenient, including by direct selection or award Reminder: By the time you’ve gotten to this point, you’ve already determined that goods or services are not available through Buy Decision, including DAS Price Agreements. Statutory Requirements Open Market purchases up to $5,000 – called “Small Procurement” Direct Selection –means we can choose vendor without competitive process May be in ODOT’s best interest to do competitive process for some purchases even though not required Remember ethics - we don’t recommend: Purchasing from your brother, the sales rep (conflict of interest) Purchasing from vendor who offers you gift certificates (gifts) Both prohibited per ORS 244

56 Small Procurement ORS 279B.065
A contract awarded under this section may be amended to exceed $5,000 only in accordance with rules adopted under ORS 279A (Amendment must not increase contract total to exceed $6,000) A procurement may not be artificially divided or fragmented so as to constitute a Small Procurement. Statutory Requirements Don’t split large purchase into smaller purchases to stay under $5,000 Fragmentation prohibited by law and ODOT Policy SUP 03-01 IG Faults DHS article

57 Complexity & Risk Matrix
Low Complexity–Low Risk Contact one vendor Make purchase High Complexity–Low Risk Low Complexity–High Risk Market research to find appropriate goods or services Select in practical or convenient manner High Complexity–High Risk 3 Quote process PO with attachments Market Research Direct Selection 3 Quote Process PO with attachments Complexity Market Research Direct Selection Direct Purchase Low complexity – Low risk One time purchase of a simple product or service. High complexity – Low risk Purchase products that must comply with very technical and complex mandatory specifications Complex when there are many products on the market that do not meet ODOT’s mandatory specs. Low complexity – High risk Very rural area – Products and services are available from 3 local vendors High risk - because local vendors are complaining about unfair business practices claiming ODOT has been purchasing from the same vendor and not giving others opportunities for ODOT business. High complexity – High risk Services that ODOT has not obtained in the past; unfamiliar with the vendors that provide the services. If services not done properly, the services could damage people or property. Risk

58 Process Map - Bid, Award, Pay
Small Procurement Bid – Award – Pay process requirements are minimal. Can be as simple as going into a store and purchasing an item using a SPOTS card. If purchase is more complex or high risk, it may be wise to do more than is required by statute To improve communication with potential bidders To provide more opportunities for local vendors to compete for ODOT business To increase enforceability of the final agreement in case things go wrong

59 Small Procurement Award in any manner deemed practical or convenient
Direct selection Competitive 3 Quote process (optional) Contracting/Purchasing method Pay direct from invoice SPOTS Visa card Purchase Order or Standard Contract (optional) Summary of requirements for Small Procurements

60 Small Procurement Procurement Responsibility
Local Purchaser: Initiates and completes purchase OPO: Information and support for local purchaser DAS: Not involved at this threshold level Summary of responsibilities for Small Procurements

61 The Magic Number Anyone want to guess what the magic number is.
Hint: It’s between 0 and 100,000

62 The Magic Number - $5,000 $5,000 or more requires: $5,000 or less:
Can use SPOTS card to make purchase $5,000 or more requires: Notification to Advocate for Minority, Women, Emerging Small Business (MWESB) Purchase order or contract Over $5,000 requires: Competitive solicitation Posting on ORPIN Additional requirements on purchase when meets or exceeds $5,000 $5,000 or less – can purchase with a SPOTS card $5,000 and more MWESB notification (statutory requirement) PO or contract required (ODOT requirement) Over $5,000 Competition required, with some exceptions (statutory requirement) Post on ORPIN (DAS requirement)

63 The Magic Number - $5,000 MWESB Notification (ORS 200.035)
ODOT must provide timely notice to the Advocate for Minority, Women and Emerging Small Business (MWESB) Required for each solicitation of $5,000 or more and each contract award of $5,000 or more Three options to meet the requirement: Self search database and fax results after award Fax for solicitation and separate fax after award Post solicitation and award on ORPIN Handout: Notification to Advocate for MWESB Options to meet requirement Self-search database; fax results after award Fax to report solicitation; fax to report award Post solicitation and award on ORPIN Handout

64 The Magic Number - $5,000 Oregon Procurement Information Network (ORPIN) (OAR ) DAS requirement applies to purchases not directly related to transportation DAS requires posting a notice on ORPIN for: Each solicitation that exceeds $5,000 Each contract award that exceeds $5,000 DAS requires all solicitations and awards over $5,000 to be posted on ORPIN Applies to purchases not directly related to transportation system

65 The Magic Number - $5,000 The Notice in ORPIN must provide:
A general description of Goods and Services to be acquired; A reasonable and sufficient interval between the first date of the notice and bid closing. For purchases exceeding $100,000, interval must be at least seven calendar days; The name, title and address of the ODOT staff authorized to receive bids; and Any other information ODOT deems to be appropriate. Notice on ORPIN must include at least this info.

66 Intermediate Procurements up to $100,000
Section 4 Procurement 201 Purchasing Goods and Trade Services

67 Intermediate Procurement
ORS 279B.070 Any procurement of goods or services exceeding $5,000 but not exceeding $150,000 Must seek at least three informally solicited competitive price quotes or proposals from prospective contractors and keep a written record of the sources of the quotes or proposals received If three quotes or proposals not reasonably available, document efforts ORS defines purchases over $5,000 up to $150,000 – “Intermediate Procurements” Delegations within ODOT – Locals can purchase up to $100,000. Statutory requirements are still fairly minimal. Seek at least 3 quotes (may have to contact more than 3 vendors) Keep written record of sources of quotes received (not required to do a written solicitation… can obtain quotes by phone) Document efforts if unable to obtain at least 3 quotes

68 Intermediate Procurement
ORS 279B.070 Award to bidder whose quote or proposal best serves the interests of agency taking into account price as well as considerations such as experience, expertise, product functionality, suitability for a particular purpose and contractor responsibility A procurement may not be artificially divided or fragmented so as to constitute an Intermediate Procurement. Statutory requirements (continued): Award to bidder who best serves interests of agency (not required to award to lowest bidder) Don’t fragment or split a large purchase into smaller purchases to stay under $150,000 Additional requirements often inadvertently skipped: notification to MWESB posting on ORPIN (when not related to transportation)

69 Amendment Limitations
ORS 279B.070 A contract awarded under this section may be amended to exceed $150,000 only in accordance with rules adopted under ORS 279A.065 So what are the rules we’ve adopted? Go to next slide -

70 Amendment Limitations
Intermediate Procurements – ODOT Authority Cumulative amount of amendments cannot exceed 25% of original contract amount Review… This applies to change orders too. ODOT authority – directly related to transportation system.

71 Amendment Limitations
Intermediate Procurements – DAS Authority If contract total will exceed $150,000, must obtain prior approval from DAS for Special Procurement Anticipated Amendments – No limit to amendments until contract total reaches $150,000 Unanticipated Amendments – Prior OPO or DAS approval is required to exceed 20% of original contract amount DAS Authority – Not directly related to transportation If original PO or Contract plus amendments will exceed $150,000, must obtain DAS approval for Special Procurement before doing amendment. Anticipated amendments – Any anticipated conditions that would require a need to amend the PO or contract – must be defined in the PO or contract. Unanticipated amendments – A totally unexpected need to change the contract.

72 Intermediate Procurement
Procurements over $5,000 up to $150,000 Competitive process required – Seek to obtain 3 quotes or proposals Keep written record of quotes or proposals received Document efforts if 3 are not available Award to quote that best serves interests of Agency Lowest bid or other considerations Contracting method Purchase Order Contract Summary of requirements for Intermediate Procurements.

73 Intermediate Procurement
Procurement Responsibility Local Purchaser: Initiate and complete purchase of $100,000 or less Submit Purchase Requisition to OPO if over $100,000 OPO: Complete procurement if over $100,000 DAS: Not involved at this threshold level Summary of responsibilities for Intermediate Procurements.

74 Complexity & Risk Matrix
Low Complexity – Low Risk Solicit quotes by phone Purchase Order (PO) High Complexity – Low Risk Low Complexity – High Risk Written solicitation /Fax to vendors or post on ORPIN PO with attachments High Complexity – High Risk More formal written solicitation Contract Request for Bid PO with attachments ITB Contract Complexity Request for Bid PO with attachments Phone Quotes PO Again, if a purchase is more complex or high risk, it may be wise to do more than is required by statute. Written solicitations not legally required, but highly recommended. Low complexity and low risk for goods and services – Phone Quotes and PO. High complexity or high risk for GOODS – Use the Request for Bids and PO with attachments (specifications, insurance requirements, price list, etc.) High complexity or high risk for SERVICES – Consider using the Intermediate ITB and contract. Generally services are considered high complexity. High complexity and high risk for goods and services – Intermediate ITB and contract or contact OPO for assistance. Risk

75 Process Map - Bid, Award, Pay
Basic Bid-Award-Pay process still applies, but with some additional activities in some of the steps. Handout: 3-Quote Checklist Market Research Identify minimum of 3 vendors Contact Vendors Solicit bids from minimum of 3 vendors Notice of solicitation to Advocate for MWESB Post on ORPIN Vendor Selection Direct selection not allowed; competitive selection Award Contract PO or contract required Notice of award to Advocate for MWESB

76 Market Research Identify potential vendors Handout
Vendors previously used by ODOT Database of certified MWESB ODOT’s Small Contracting Program databases ODOT’s Contractor Emergency Registry System (CERS) Oregon Procurement Information Network (ORPIN) Telephone book Internet Handout: Helpful Websites and Links Handout

77 Identifying Potential Vendors
Qualified Products List (QPL) List of products that meet ODOT specifications Includes contact info for manufacturers and vendors for information about product specifications Does not limit who you purchase from; do market research to identify potential vendors For QPL products, not limited to the vendors listed on the QPL. Vendors are info resources for products specs. If you can’t find vendors, get some leads from Dean Chess or Otto Heider.

78 Identifying Potential Vendors
If unable to locate three or more local vendors Conduct market research for vendors outside locale Check our specifications and requirements; are they unnecessarily restrictive? Can’t find vendors in your locale area – cast a wider net for potential vendors. Other counties Other regions Other states Other countries Only one vendor in your locale – probably not sole source sole source is the only vendor must meet one of five criteria in statute

79 Prepare Solicitation Prepare solicitation documentation so each vendor is given the same information Script for phone quotes Request for Bids form Intermediate Invitation to Bid form Additional attachments, such as: Product Specifications Statement of Work Special Terms and Conditions Insurance Requirements Easier to give all vendors same info when you do written solicitations. Fair and level playing field - give all vendors the same info Solicitation requirements – how to submit bids, deadline, ODOT contact info Mandatory and desirable specifications – and other related features or accessories they offer Contract requirements – fax or them a copy of the PO T&C with any additional requirements or attachments

80 Notice of Solicitation
Keep documentation Timely notification to MWESB Advocate of solicitation Complete self-search of MWESB database and include certified businesses in pool of vendors to be contacted Fax notification form of solicitation Post solicitation on ORPIN (Required when under DAS Authority) MWESB Notification – Use one of the 3 acceptable methods – fax notice/wait, self search, or post on ORPIN/wait.

81 Contact Vendors Contact vendors to obtain minimum of 3 quotes
Keep documentation Contact Vendors Contact vendors to obtain minimum of 3 quotes Communicate to vendors by phone or written solicitation If unable to obtain 3 quotes, document efforts made to comply Document bid information received Phone - Document on “Purchase Phone Quote” form or Faxed - Keep bid forms received from vendors Solicit minimum of 3 quotes, bids or proposals If 3 are not reasonably available, fewer will suffice, but document the effort made to solicit 3 If you did MWESB self search, include certified vendors in pool of vendors to be contacted

82 Evaluation and Selection
Evaluate and select vendor on basis specified in solicitation: Lowest bid Must meet all mandatory specifications Use total price of required products or services as “bid” to determine low bid; do not include price of desirable features

83 Evaluation and Selection
Evaluate and select vendor on basis specified in solicitation: Best serves ODOT interests Must meet all mandatory specifications Desirable features considered in selection Price or cost is one of the evaluation criteria Document the basis for selection and how it best serves ODOT’s interest Evaluation of other criteria – Group discussion of possible other criteria Delivery Quality or Functionality of product Can evaluate additional features offered by vendor, if included in the solicitation.

84 Evaluation and Selection
Bidder must be responsive and responsible Responsive – Complied with all requirements of solicitation Responsible –As defined in ORS 279B.110 or ORS 279C.375 If ODOT determines the apparent “winning” bidder is not responsive or not responsible, document the basis for that determination Handout: Responsive and Responsible Bidders What if you receive bids from 4 bidders, bid closes, you notify the lowest bidder you intend to do business with them, and then you receive a bid from a 5th bidder that’s even lower? Are you required to change the award to the 5th bidder? No - 5th bidder is non-responsive; bid received after bid close. What if the lowest bid is from a bidder that you have reason to believe is an unemployed individual who submitted a bid in hopes of finding work and they are not really a viable business? Are you still required to award to them? Request info from bidder to determine if they are “responsible” or contact OPO for assistance. Handout

85 Award Contract Notify selected bidder and send contract
Keep documentation Notify selected bidder and send contract PO with standard terms and conditions and other attachments Contract, exhibits and attachments Notification to other bidders Can do as a courtesy; it’s not required results with “bid tab” of bidders and bid prices For low bid contracts: Some buyers always send a bid tab of results to all bidders. Some require public records request to release that info. Whatever you decide to do, be consistent in your business practice.

86 Notice of Award Keep documentation Timely notification to MWESB Advocate of contract award Fax notification of self search and award; or Fax notification form for award; or Post award on ORPIN (required when under DAS authority)

87 Phone Solicitation Best limited to simple, one-time purchase of goods
Market Research Search MWESB database Identify vendors to obtain minimum of 3 quotes Prepare Solicitation Fill out top section of “Purchase Phone Quote” form Prepare a script of what to tell vendors Handout: Purchase Phone Quote form Handout

88 Phone Solicitation Contact Vendors
Call vendors; describe product or services needed Confirm vendors can meet required specifications Obtain price quotes Document vendor contacts and quotes on “Purchase Phone Quote” form

89 Phone Solicitation Evaluate Bids and Select Vendor
Compare quotes obtained from vendors Reject quotes that are not “responsive” Award is typically based on lowest bid If selecting other than lowest bid, document how award best meets ODOT’s interest

90 Phone Solicitation Award Contract Make Purchase
Send PO with terms and conditions to selected vendor Send MWESB notification of self-search and award If under DAS Authority, post “Purchase Phone Quote” on ORPIN Make Purchase

91 Solicitation Exercise
Let’s buy attenuators! Exercise

92 Let’s buy attenuators! Activity Disclaimer
This activity is very loosely based on actual ODOT purchases. The scenario, technical specifications, and bid information do not reflect actual work zone safety requirements, approved product or delivery specifications, or actual product costs. The information compiled for this activity was imaginatively compiled and embellished on by OPO trainers solely for procurement training purposes.

93 Let’s buy attenuators! 3-Quote Checklist Define Need
Expenditure & Procurement Authority in place? Available through Buy Decision sources? Is purchase IT, PSK, PW/PI, or GTS over $100,000? Assess complexity and risk Complete self-search for MWESB Identify vendors to contact for minimum of 3 bids Complete solicitation document Evaluate bids and make selection Complete MWESB notification form

94 Written Solicitation Not required; recommended for most purchases
Market Research Prepare Solicitation “Request for Bid” or “Intermediate ITB” form Specify how bids must be submitted and deadline Describe selection criteria to be used for award Include written specifications or statement of work Include sample of contract terms and conditions, and other attachments when applicable Solicitation forms are located on OPO Intranet Site – Procurement Forms Goods, Trades Services and Public Works section

95 Request for Bid New for written 3-Quote solicitation
Limited to simple, one-time purchase of goods Generally used with a Purchase Order Low to medium complexity or risk Not recommended for services Purchase Order lacks important provisions Handout: Request for Bid We’ll go through this packet in more detail later. Handout

96 Intermediate Invitation to Bid
Two versions available online: Intermediate ITB for Goods Includes a comprehensive contract For high complexity or high risk purchases of goods Intermediate ITB for Services Recommended for procuring all trade services Handout: Intermediate ITB for Goods Intermediate ITB for Services We’ll go through this packet in more detail later. Handout

97 Written Solicitation Contact Vendors Evaluate Bids and Select Vendor
Send solicitation documents by or fax When DAS authority, post solicitation on ORPIN Receive completed bid forms Evaluate Bids and Select Vendor Evaluate bids based on requirements specified in the solicitation Select based on criteria specified in the solicitation For more formal procurements, best practice is to evaluate only the bids received prior to Bid Close date and time With informal process, can be more lenient about bid close. Indicate a date that they need to get back to you by (e.g. put a day preferred by, but not a time, etc.) If not getting bids, call and ask why. If they need more time, okay to give them more time if you can. Can close a bid early if you’ve received all the bids you know you’re going to get.

98 Written Solicitation Award Contract Make Purchase
Notify selected bidder; send PO or contract Courtesy notice with bid tab to other bidders (optional) Send MWESB notification of award or post notice on ORPIN, if under DAS Authority Make Purchase

99 Purchase Orders Section 5 Procurement 201
Purchasing Goods and Trade Services

100 Purchase Order Responsibilities
Financial Administration and Standards Manual Chapter Issuing Purchase Orders POs are sensitive inventory Keep in a secure location Record issuance of each PO in log provided with pad of POs Upon issuance of all POs in pad, forward log to Financial Services for reconciliation Handout: FASM Issuing Purchase Orders Handout

101 Purchase Order Forms Order Purchase Orders from ODOT Storeroom (Form ) Electronic Purchase Order available on Intranet Financial Services payment forms

102 Purchase Order Forms When using electronic Purchase Order:
Employ unused PO number from PO pad and ensure number is not used for another purchase Fill out electronic PO online Print PO and obtain approval signature on printout Make copies and distribute appropriately

103 Purchase Order Requirements
Purchase Order (PO) required for: Purchases of $5,000 or more Purchases under $5,000, when required by vendor To order off existing contract or price agreement, when required Purchase Order NOT required: For invoice payment on existing contract or price agreement, when the contract or price agreement doesn’t require a PO when submitting orders Handout: FASM Issuing Purchase Orders

104 Using Purchase Orders How is Purchase Order being used?
(Option A) as legally binding contract Send PO, standard terms & conditions, and other attachments to vendor; keep copies (Option B) as ordering form Reference contract or price agreement number on PO Do not include PO standard terms and conditions; they do not apply Handout: How to Fill Out a Purchase Order Form Refer to handout page with copy of PO Box about signature blocks – Options A or B Option A – Using PO as a contract Option B – Using PO as an order device from an existing contract or PA Purchase Orders can be used as the contract for many purchases Complex or high risk purchases, you may use Standard Contract instead Do not write your own contract!! Do not sign vendor contracts without approval from OPO or DOJ!! There are specific terms and conditions and certifications that ODOT is legally required to include in all our contracts Handout

105 Using Purchase Orders Send PO and other attachments to vendor
Keep copies for your files “Approved by” signature on PO approves payment of invoice; separate signature on invoice not required Send PO with invoice to Financial Services for payment, signature not required on invoice. Handout

106 Purchase Order as a Contract
Requirements not written in the contract are not legally enforceable Use attachments for additional requirements Examples: Technical specifications Statement of Work Insurance requirements Map of project site In “Special Terms & Conditions” include language to incorporate the attachments into the contract by reference PO Attachments For additional documents that need to be part of the contract See back page of PO instructions for language to use to incorporate attachments into contract.

107 Purchase Order as a Contract
Anticipated Amendments Applies to purchases under DAS authority Identify anticipated circumstances which would require amending the PO (contract) List “anticipated amendments” on PO or attachment Anticipated amendments can exceed 20% of original contract amount without OPO or DAS approval Amending a Purchase Order Contact the ODOT Procurement Office for guidance Anticipated Amendments (when using PO as a contract) Examples: Anticipated amendment to add services and renegotiate contract costs if assumptions about current project conditions are inaccurate Painting - if dry rot in building, amend to extend schedule, add services and cost for painting primer on repaired areas

108 Solicitation Exercise
Envelope Opening Machine Pass out technical specifications

109 Envelope Opening Machine
Scenario DMV has an aging and technologically deficient envelope opening system. A dramatic increase in mail volume over the past two years has caused a back log of DMV’s income business-mail processing time. DMV wants to obtain a higher capacity envelope opening machine with more robust features and increased safety to meet the increasing demands of mail handling. The DMV manager has approved up to $13,000 for purchase of a new system.

110 Envelope Opening Machine
3-Quote Checklist Assess complexity and risk Fax MWESB solicitation notification Prepare “Request for Bid” solicitation document Complete Purchase Order form for purchase Fax MWESB award notification Quickly review technical specs – Assess complexity & Risk; strategize More complex purchase – Low risk Written solicitation instead of phone quotes Option: Request for Bid form Purchase Order for the contract Request for Bid takes more time, so fax MWESB notices for solicitation and award Go through the Request for Bid document – how would this be modified for this purchase?? Review the Purchase Order Form for the purchase

111 Solicitation Exercise
Gettings Creek State Rest Area Exercise

112 Gettings Creek Septic Tanks
Scenario The Gettings Creek State Rest Area (SRA) septic tanks are out of compliance with DEQ regulations. All of the tanks need to be pumped out and the walls sprayed down and cleaned with clean or gray water. Based on traffic and SRA usage, the work must be done between the hours of 8 pm and 5 am. All work must be completed in no more than 2 days. The District Manager has approved up to $18,000 to have this work completed.

113 Gettings Creek Septic Tanks
3-Quote Checklist Assess complexity and risk Review “Intermediate Invitation to Bid for Services” solicitation document Meet MWESB notification by posting Intermediate ITB on ORPIN Discuss complexity and risk of the scenario High complexity and high risk Phone quotes or written solicitation? Recommend: Intermediate ITB for all services Longer process, so either fax MWESB notices or post solicitation and award on ORPIN Review the ITB – compare against template to show what’s been modified.

114 What if… The estimated cost was under $100,000, yet all bids came in over $100,000?! Contact ODOT Procurement Office (OPO) Send all solicitation documentation to OPO OPO will review the documentation If it complies with requirements, OPO will award the contract If it doesn’t comply with requirements, OPO will cancel and redo the solicitation First check… Are funds available to cover the higher cost? Does person with expenditure authority approve the purchase at the higher cost? Local Purchasers do not have procurement authority over $100,000 Contact OPO to complete the solicitation

115 Procurements over $100,000 Section 6 Procurement 201
Purchasing Goods and Trade Services

116 Procurement Authority
Local purchaser not authorized to solicit for: Goods and Trade Services over $100,000 – Send Purchase Requisition to OPO Public Improvements (or Public Works) – Send Purchase Requisition to OPO Personal Services – Send Personal Services Request form to OPO IT Related Purchases – Contact IT Procurement and Asset Management (ITPAM) Local purchasers’ authority is limited to $100,000 OPO conducts solicitations over $100,000 when transportation related (ODOT authority) OPO conducts solicitations when over $100,000 up to $5 million when not related to transportation (DAS authority) DAS conducts solicitation when over $5 million and not related to transportation (under DAS authority)

117 Complexity & Risk Matrix
Higher complexity: More variations available in products and services Federal funding included Public Improvement or Public Works Higher risk: Larger projects have more opportunities for things to go wrong When things go wrong, often larger impact on ODOT or public High Complexity Low Risk High Complexity High Risk Complexity Low Complexity Low Risk Low Complexity High Risk Complexity increases: High dollar contracts (over $100,000) Include federal funding Public improvement or public works Risk increases: Projects are larger and so more opportunities for things to go wrong More impact on ODOT or public if things go wrong Risk

118 Local Purchaser Responsibilities
Define need Obtain approval to purchase Develop specifications or statement of work Define criteria to be used to select vendor Send Purchase Requisition to OPO Work collaboratively with OPO staff throughout solicitation Refer vendors to ODOT point of contact during open solicitation (from advertising to award) Local purchaser responsibilities for all procurements over $100,000 If a vendor contact you with questions about the solicitation, refer them to the OPO Point of Contact Very important to have one person communicating with vendors – Reduces chances of one vendor receiving more info and unfair advantage over other vendors Reduces chances of vendor getting conflicting info Fair and level playing field for bidders

119 OPO Responsibilities Receives Purchase Requisition and determines procurement authority Related to Transportation – ODOT Authority OPO conducts all solicitations over $100,000 Not Related to Transportation – DAS Authority OPO conducts solicitations $100, to $5 million DAS conducts solicitations over $5 million When DAS conducts solicitation, OPO: Sends Purchase Request to DAS Collaborates with DAS on local purchaser’s behalf OPO responsibilities for purchases over $100,000 UPDATE: Not related to transportation – DAS authority

120 OPO Responsibilities Consults with customer and provides periodic updates of procurement status Prepares solicitation documents Prepares Request for Bid, ITB or RFP document Reviews and edits specifications, statement of work and attachments Obtains DOJ legal sufficiency review, when required OPO responsibilities when soliciting for purchases over $100,000 Collaborate with you to prepare solicitation documents – Goals: To meet your need To comply with legal requirements To effectively manage risk to ODOT and the public Fair and level playing field for bidders Legal sufficiency review - estimated total purchase exceeds $150,000

121 Solicitation Methods and Forms
Intermediate Procurement options (over $100,000 up to $150,000) Request for Bid Intermediate Invitation to Bid Invitation to Bid (ITB) Request for Proposal (RFP) Formal Procurements options (over $150,000) Solicitation options: [More info about these on next few slides]

122 Invitation to Bid (ITB)
ITB used to conduct Competitive Sealed Bidding Advantages: Typically faster than RFP process Solicitation posted on ORPIN minimum of 14 days Promotes price competition between vendors The solicitation document becomes the contract

123 Invitation to Bid (ITB)
ITB used to conduct Competitive Sealed Bidding Disadvantages: Must describe exactly what you require in the specifications Sometimes difficult to evaluate bid info to determine if it meets all the mandatory specifications Must select lowest bid even if another bid meets ODOT’s need better Limited negotiations of contract allowed Disadvantages: include all your mandatory specifications, or you may not get them ncluding mandatory specifications that are not really needed, risk of rejecting a bid that meet ODOT’s need Must select lowest bid even if another bid would meet ODOT’s need better

124 Request for Proposal (RFP)
RFP used to conduct Competitive Sealed Proposal Advantages: Can select based on criteria in addition to price Can solicit proposals for solutions to a problem Can negotiate contract after selection (including cost) Advantages: Can base selection on multiple factors; not required to award to lowest bidder

125 Request for Proposal (RFP)
RFP used to conduct Competitive Sealed Proposal Disadvantages: Takes more time than ITB process Solicitation posted on ORPIN a minimum of 30 days Requires extensive evaluation, scoring and ranking of proposals Contract is separate from the solicitation document Disadvantages: Must slower solicitation process

126 OPO Responsibilities Contact with vendors
Posts solicitation documents on ORPIN ODOT’s single point of contact for solicitation Responds to requests for clarification and protests Prepare and issue addenda, when needed Evaluation and Selection Receives bids or proposals Completes pass/fail administrative evaluation of bids or proposals Facilitates evaluation of bids or proposals by customer’s evaluation team OPO responsibilities when soliciting for purchases over $100,000 (continued) After preparing the solicitation documentation, OPO manages the solicitation process on your behalf.

127 OPO Responsibilities Award and Contract
Issues Notice of Intent to Award to selected vendor Notifies competing vendors of intent to award Responds to protests Obtains required documents from selected vendor Assists with negotiations of contract, when requested Prepares contract document Obtains DOJ legal sufficiency review of contract, when required Obtains required signatures on contract Distributes copies of executed contract Maintains procurement file for solicitation and award OPO responsibilities when soliciting for purchases over $100,000 (continued)

128 Contract Administration
Section 7 Procurement 201 Purchasing Goods and Trade Services

129 Contract Administration
Procurement Overview Contract Management Award & Execute Contract ITB Xxx xxx x x xxxx xxx xxxx xx x VENDOR Contract Administration is the phase of the procurement process that begins when the contract is signed. There are contract administration duties for all ODOT purchases. Contract Administration 129

130 Process Map - Bid, Award, Pay
Contract administration relates to the “Pay” portion of the Bid-Award-Pay process.

131 Scoping Contract Administration
Impact of Complexity and Risk on Contract Administration Level of effort Degree of detail Timelines Increasing Complexity Active Contract Administration Complexity Minimal Contract Administration Increasing Risk Complexity Risk Low & Risk Increasing High The amount of time and effort spent doing contract administration is often related to the complexity and risk of the purchase. For example… When purchase is Small Procurement of goods – go into store, purchase item with a SPOTS card Contract administration - simple as logging purchase on SPOTS log, submit receipt and SPOTS log to Financial Services When purchase is Intermediate or Formal Procurement for services on long-term project Time and effort on contract administration increases More opportunities for things to go wrong Greater impact to ODOT or public when things go wrong We’ll talk about this more. Risk

132 Contract Administrator
The officer, employee, or other individual designated in writing as Contract Administrator in the contract Responsible for administering the contract; can delegate duties, but not the responsibility Good contract administration starts with knowing what’s in the contract Responsibility for contract administration is assigned to Contract Administrator Contract Administration responsibility typically delegated in writing; often to the ODOT staff requesting the purchase Large purchases - contract administrator is specifically named in contract Small purchases - person listed as “Agency contact person” on PO Contract Administrator can delegate duties, but not the responsibility Read the contract!! To do effective contract administration, you have to know what’s in the contract.

133 Effective Contract Administration
For Goods Order Receive and inspect Accept or reject Pay invoice(s) Monitor contract expiration For Services Assure contractor does all work required in the contract Assure performance effort is appropriate and proficient Assure satisfactory quality Assure timeliness of performance Assure compensation is within available contract limits Evaluate and document performance Document - Document - Document Contract Administration looks different for goods than it does for services. Services generally require more time and effort than purchase of goods.

134 Contract Administration of Goods
Order Follow ordering requirements in the contract Receive and Inspect If damage is visible, refuse shipment and contact vendor Verify correct goods included in shipment Inspect goods for damage and functionality Option: Visible damage – photograph and send to vendor

135 Contract Administration of Goods
Accept or reject Document acceptance on packing slip and sign PO “received by” Or if rejected, contact vendor and arrange for return of item

136 Contract Administration of Goods
Pay invoice Ensure invoice reflects only goods received and accepted Ensure that amounts charged comply with contract requirements Short pay invoices to correct amounts when needed – document reasons for adjustments on invoice and notify vendor ODOT

137 Contract Administration of Goods
Pay invoice (continued) Send Financial Services the invoice, the approved PO and written verification that goods were received Invoices must be paid within the number of days specified in the contract, typically “Net 30” If payment is after 45 days from receipt of invoice, ODOT may be charged a penalty for late payment

138 Contract Administration of Goods
Monitor contract expiration date Do not order goods after contract expiration If extending contract, execute amendment before contract expires Goods ordered and received prior to contract expiration can be paid for after contract expiration To pay out of current budget, goods must be received before end of biennium and paid for prior to biennium payment deadline Amendment to extend a contract are sometimes completed by OPO staff. When extending a contract, there may be several things to follow up on: Price increases Confirmation of insurance renewals

139 Contract Administration of Services
Assure contractor does all work required in the contract Periodically check that services performed are in the contract Don’t pay for services that are: Not in the contract In the contract, but not being performed

140 Contract Administration of Services
Assure performance effort is appropriate and proficient For time and materials contract, contractor’s employees should be well managed by their supervisor and kept productive as much as possible Apprentices should not be doing journeyman work

141 Contract Administration of Services
Assure satisfactory quality Inspect the work deliverables to confirm they meet the requirements in the contract Document issues and contact contractor If requirements in the contract are clear, ODOT doesn’t pay for additional work to correct issues If requirements not in the contract or not clear, ODOT may have to pay extra

142 Contract Administration of Services
Assure timeliness of performance Track date work deliverable is completed against schedule in contract If late, be proactive on next deliverable Check status with contractor before next due date If delays are anticipated, ask what steps they’re taking to complete deliverable on time Report late deliverables on performance evaluation

143 Contract Administration of Services
Assure compensation is within available contract limits Prices or rates used on invoice must be within contract limits Total amount of all invoices paid must not exceed total contract amount

144 Contract Administration of Services
Evaluate and document performance Complete a written performance evaluation to document quality of contractor’s performance Provide contractor a copy and an opportunity to respond Can consider documented performance for award of future contracts

145 Contract Administration of Services
Monitor contract expiration date Do not authorize services after contract has expired; all work must stop! If extending contract, execute amendment before contract expires Services performed prior to contract expiration can be paid for after contract expiration Change Orders are a type of Amendment – it formally documents an agreed-to changes to the contract.

146 Change Management Amend contract in writing to:
Change requirements Add or remove services Add, remove, or modify list of goods Change billing rates or price list Increase or decrease total contract amount Change schedule of work deliverable due dates Change contract expiration date Cannot add money to contract unless providing additional products or services

147 Change Management Amendments may require DOJ legal sufficiency approval All required signatures must be obtained before terms of amendment are effective If adding more work, contractor should not start the new work until the amendment is signed. We should not be invoiced for work that has occurred prior to execution of the amendment.

148 Change Management Small Procurements
Amended contract cannot exceed $6,000 Intermediate Procurements – ODOT Authority Cumulative amount of amendments cannot exceed 25% of original contract amount Review… This applies to change orders too.

149 Change Management Intermediate Procurements – DAS Authority
If contract total will exceed $150,000, must obtain prior approval from DAS for Special Procurement Anticipated Amendments – No limit to amendments until contract total reaches $150,000 Unanticipated Amendments – Prior OPO or DAS approval is required to exceed 20% of original contract amount Review… This applies to change orders too.

150 Records Retention Keep Documentation of Solicitation, Selection and Award Documentation sent to potential bidders Bids received Evaluation of bids Special OPO or DAS approvals Written explanation of bid rejections Basis of selection if not lowest bid Notice of award to vendors Purchase Order or Contract Keep documentation – may be needed for: DOJ review Governor’s Office inquiries Audit of procurement records Justification for future selection and award For direct selection small procurements there may not be any documentation.

151 Records Retention Not subject to public records requests
Proprietary information such as vendor trade secrets Confidential information such as comments or advice ODOT receives from DOJ Keep this documentation separate in the file or keep in a separate file Bids or proposals are public records and must be available for public inspection upon written request Proprietary Information Bidder must mark information in their bid that is Proprietary Proprietary info is exempt from public disclosure when meets criteria in statutes Confidential Information On solicitations and contracts over $150,000 go to DOJ for legal sufficiency review Revisions, comments or advice received from DOJ is confidential; do not send to contractor; could compromise our client-attorney privilege for the whole contract.

152 Records Retention Contract administration documentation
Invoices Contract amendments Correspondence with vendor, including s Performance evaluations Keep records for 6 years after purchase or contract expiration; then destroy Keep 10 years after substantial completion if contract includes federal funds and for construction, alteration or repair of public improvements For small procurements, documentation may just be the invoice Send invoice to Financial Services for payment Financial Services maintain copy of invoice (imaging)

153 Purchasing Jeopardy Jeopardy

154 Resources and Wrap Up Section 8 Procurement 201
Purchasing Goods and Trade Services

155 Points of Contact ODOT Procurement Office assists with: Defining Need
Solicitation and Selection Award and Negotiation Performance Issues Changes & Amendments Billing Rate Review and Acceptance Invoice Review and Processing Many points during procurement where Program Staff and OPO collaborate: Don’t hesitate to contact OPO Information Questions Assistance

156 Online Resources - Intranet
OPO’s Home Page: Finding it: ODOT Home → Topics A-F, Contracts What’s available: Contact Us Request OPO Services Forms and Templates Procurement-related Training Use A-Z Index to find what you’re looking for Quick online tour Show how to find: Contact info for customer focus teams Procurement Forms A-Z Index More if there’s time

157 Training Available Classes Coming in Spring 2012
Procurement 101: Contracting Basics Procurement 201: Purchasing Goods and Trade Services Fiscal and Procurement Responsibilities Coming in Spring 2012 Contract Administration for ESB Contracts Procurement related classes

158 Training Available Online Training and Resources Speaking Procurement
First Steps to Procuring Goods and Services Authority to Procure MWESB Notification Small Procurement of Goods and Trade Services Intermediate Procurement – Legal Requirements Intermediate Procurement – ‘3-Quote’ Checklist and more to come! Online tutorials are available

159 Training Objectives After completion of this training, participants will be able to: Identify the roles and responsibilities for local procurement of Goods and Trade Services up to $100,000 Describe the Small Procurement process Practice procuring Goods and Trade Services using the ‘3 Quote’ process Apply Contract Administration practices to both simple and complex purchases of Goods and Trade Services Use the Oregon Procurement Information Network (ORPIN) to find existing Price Agreements

160 Thank you for your participation!
Developed by ODOT Procurement Office Thank you for your participation! A training evaluation survey will be ed to you soon We appreciate your feedback Thank you Evaluation will be ed – please fill it out (maybe 5 minutes) Certificates – on back table or will be mailed to you


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