1. Purchasing Policy and Bidding Requirements Leadership Training May 3, 2007 by: Rick Ashby, C.P.M., A.P.P. Davis School District Director of Purchasing & Materials Distribution

2. Lessons Learned – Title I 1. Forwarding of Approvals 2. Sole/Single Source Requests 3. Vendor Set Up 4. Conflicts of Interest 5. Ask Questions 6. Require More Detail & Documentation 7. Keep Both Eyes Open

3. Lessons Learned – AG Investigation 1. Specification Writing & Development 2. Proprietary Specifications (Sole/Single Source) 3. Inadequate Justification & Supporting Documentation 4. Procurement Review and Approval 5. Open Competition 6. Ongoing Review & Justification

4. Purchasing Authority “The Director of Purchasing is delegated authority by the…Board to carry out the procurement functions of the District and to ensure such functions are in accordance with established policies and written procedures. …” DSD Purchasing Policy 6F-103(2)

5. Procurement Activities Definition: “means buying, purchasing, renting, leasing, leasing with an option to purchase, or otherwise acquiring any supplies, services, or construction. …

6. Procurement Activities (cont.) “It also includes all functions that pertain to the obtaining of any supply, service, or construction, including description of requirements, selection, and solicitation of sources, …

7. Procurement Activities (cont.) “…preparation, and award of a contract and all phases of contract administration.” UPC 63-56-105

8. Rule of Thumb What is a Procurement Activity? Generally, any activity that involves: Vendors Specifications Pricing & Negotiations Commitment of Funds Implementation & Administration of Contracts

9. Video Clip Who is responsible for the use of public monies? Who is accountable for the use of public monies?

10. Procurement Controls Protect Public Funds from Misuse Avoid Financial Problems Build Public Trust Develop Healthy Vendor Relationships Efficiency vs. Accountability & Responsibility

11. Procurement Activities Governed by: PUBLIC SECTOR State Laws (Utah Procurement Code 63-56) State Rules (Utah Procurement Rules R33-1) District Purchasing Policy (6F-103) Purchasing Department Procedures & Guidelines Professional Public Procurement Ethics

12. Public Sector Procurement The public has a right to know how funds are expended & the manner that they are spent - Therefore - The Disposition & Expenditure of Public Funds Requires District Employees Be Held to a Higher Standard Than Counterparts in Private Organizations

13. Ten Commandments of Ethical Government Purchasing 1. Be Independent

14. Ten Commandments of Ethical Government Purchasing 1.Be Independent 2. Act Only in the Public Interest

15. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money

16. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law

17. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law 5.Strive for Efficiency

18. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law 5.Strive for Efficiency 6.Protect the Economy

19. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law 5.Strive for Efficiency 6.Protect the Economy 7.Take Nothing, Ever

20. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law 5.Strive for Efficiency 6.Protect the Economy 7.Take Nothing, Ever 8.Do Not Socialize with Vendors

21. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law 5.Strive for Efficiency 6.Protect the Economy 7.Take Nothing, Ever 8.Do Not Socialize with Vendors 9.Maintain Confidentiality

22. Ten Commandments of Ethical Government Purchasing 1.Be independent 2.Act Only in the Public Interest 3.You Are a Trustee of the Public’s Money 4.Follow the Law 5.Strive for Efficiency 6.Protect the Economy 7.Take Nothing, Ever 8.Do Not Socialize with Vendors 9.Maintain Confidentiality 10. Do Not Play Favorites by: Suzanne M. Dallimore, Esq.

23. Higher Standards Applicable to Purchasing Dept. Staff Only? NO ! “Any person acting…in any official capacity [who] participates in the procurement of supplies, services, construction, real property or insurance…” DSD Purchasing Policy 6F-103(14)

24. Public Procurement Objectives Ensure Fair & Equitable Treatment of all Persons Who Deal with the Procurement System of the [District] Provide Increased Economy in [District] Procurement Activities Foster Effective Broad-Based Competition within the Free Enterprise System UPC 63-56-101

25. Applicability “… all purchases made by the District…; i.e. schools, departments, programs, etc. “… regardless of the source of the money to be expended, including but not restricted to: - tax money - state & federal grants - donations - all types of fees - revenue generated by programs, schools, departments, etc.

26. Applicability (cont.) “… all purchases made through…approved purchase orders, school generated purchase orders, expenditure requests and purchasing/travel cards. “… all purchases of supplies, equipment, materials, construction, real property, and services. DSD Purchasing Policy 6F-103(3)

27. Approval to Commit Funds “All transactions that result in a commitment of District/School funds shall be approved by the applicable budget manager prior to making purchasing arrangements.” DSD Purchasing Policy 6F-103(4)

28. Small Purchase Authority  Budget managers have authority to make small purchases of any type less than $10,000: Exception #1: Purchases of construction and architect/engineering services limited to $50,000 Exception #2: Purchases made with a Visa Purchasing card limited to $250 Exception #3: Purchases made with a Visa Travel card limited to $20,000 with prior travel approval Exception #4: Emergency purchases (a condition that threatens body, life or property) Exception #5: Purchases > $10,000 covered under an existing District or State contract Provided that …

29. Small Purchase Authority (cont.) 1. Three (3) written quotes are obtained for purchases > $5,000 and < $10,000 – (retained by Purchasing) 2. Three (3) verbal quotes are obtained for purchases > $1,000 and < $5,000 – (retained by school/dept.) 3. Quotes encouraged (not required) for purchases < $1,000 DSD Purchasing Policy 6F-103(5)

30. Handout “Small Purchase Procedure Decision Tree” - Using District Funds - Using School Funds “Bid Procedure Decision Tree” - All purchases > $10,000

31. Defining Small Purchase Amount If a Purchase Order is to be issued, the total dollar amount of the requisition drives the necessity of obtaining written, verbal or no quotes. If a Contract is to be issued, the aggregate total value of all possible purchases over the entire term of the contract drives the necessity of obtaining written, verbal or no quotes. Caution: Sub-dividing purchases into smaller unit values to avoid Purchasing procedures is prohibited

32. Limited Authority Budget managers do not have authority to do the following without Purchasing Dept. involvement: 1.Make purchases > $10,000 2.Enter into contracts or agreements that effectively encumber or commit funds beyond the current fiscal year 3.Approve single or sole source purchases (DSD Purchasing Policy 6F-103(8))

33. Large Purchase Authority Purchases of any type greater than $10,000 The Purchasing Department must:  Conduct a formal sealed bid process  Issue a public notice of bids  Receive all sealed bid responses  Open all sealed bids in a public bid opening  Coordinate bid review, evaluation and award processes  Implement & administer contracts

34. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency

35. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2.Competition Will Almost Always Yield the Best Product at the Right Price

36. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2.Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids

37. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2.Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications

38. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2. Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications 5.Be Creative and Open to New Approaches

39. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2. Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications 5.Be Creative and Open to New Approaches 6.Someone is Trying to Rip You Off

40. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2. Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications 5.Be Creative and Open to New Approaches 6.Someone is Trying to Rip You Off 7.You Have a Duty to Rely on Competition

41. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2.Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications 5.Be Creative and Open to New Approaches 6.Someone is Trying to Rip You Off 7.You Have a Duty to Rely on Competition 8.Avoid Acceptance of Gratuities

42. Ten Commandments for Public Bidding 1.Bidding Rules Emphasis Fairness Over Efficiency 2. Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications 5.Be Creative and Open to New Approaches 6.Someone is Trying to Rip You Off 7.You Have a Duty to Rely on Competition 8.Avoid Acceptance of Gratuities 9.The Bidding Process is an Open Process

43. Ten Commandments for Public Bidding 1. Bidding Rules Emphasis Fairness Over Efficiency 2.Competition Will Almost Always Yield the Best Product at the Right Price 3.Local Businesses Must Compete for Bids 4.Existing Vendors Should Not Write Your Bid or RFP Specifications 5.Be Creative and Open to New Approaches 6.Someone is Trying to Rip You Off 7.You Have a Duty to Rely on Competition 8.Avoid Acceptance of Gratuities 9.The Bidding Process is an Open Process 10. Bid Results are Public Author - Unknown

44. Purchasing Dept. Staff www.davis.k12.ut.us/district/purchasing

45. Questions?