Purchasing Guidelines, Updates and Tips Joe Bryant– Purchasing Supervisor Tonya Hodges- Buyer

Outline References/ Definitions Documentation Small Purchases Bids, RFPs Pre-qualified Vendor Pools Public Notice Sole Source and Purchasing Exemptions Multiyear Contracts What to watch out for Bid Splitting Ethics Penalties

References Ethics Act ~ Procurement code ~ 63G-6a Utah Administrative Rules R33-3

Definitions “Procure” or “procurement” Means buying, purchasing, renting, leasing, leasing with an option to purchase, or otherwise acquiring a procurement item Includes all functions that pertain to the purchase of a procurement item, including: Description of requirements; Selection process; Solicitation of sources; Preparation for soliciting a procurement item; Award of a contract; and All phases of contract administration. “Procurement item” is a supply, a service, construction, or technology 63G-6a

Documentation  What is documented is done….we must provide if requested under GRAMA Statute  Include the following information….at a minimum:  name of the provider  description of the procurement item  date of the procurement  expenditure made  Procurement officer maintains a record of all….  contracts made pertaining to small purchases  sole source procurement(s)  emergency procurement(s) 63G-6a-2002

Small Purchases Thresholds for Individual Procurement Item(s) under $1,000: Rules on small purchases may include the following: The use of electronic, telephone, or written quotes Save quotes in your purchasing file Individual Procurement Threshold = $1,000 Maximum amount that can expend to obtain a single item/service from one vendor at one time 63G-6a-408, R33-3

Small Purchases Thresholds for Individual Procurement Item(s) under $1,000: Single Procurement Aggregate Threshold = $5,000 REFERENCE UPDATED PROCUREMENT TRAINING G-6a-408, R33-3

Small Purchases Thresholds for Individual Procurement Item(s) under $1,000: Annual Cumulative Threshold = $50,000 Maximum total annual amount that can be expended to obtain individual procurement items costing less than $1,000 purchased from the same vendor during the fiscal year (July 1- June 30) not to exceed $50,000 without a procurement process Examples: Artificial plants costing each $700, totaling $45,000 Packages of 10 CDs costing each $30, totaling $30,000 Reams of special bond paper costing each $20, totaling $20,000 Large storage bins $500, totaling $50,000 Plumbing Services through out the District, totaling $45,000 63G-6a-408, R33-3

Small Purchases –Blanket PO’s Thresholds for Individual Procurement Item(s) under $1,000: Annual Cumulative Threshold = $50,000 Schools and Departments may select the best source by direct award without seeking competitive bids or quotes Whenever feasible, the school or department shall use a rotation system or other system to allow for competition Schools and Departments may not use small purchase standard procurement process for ongoing, continuous, and regularly scheduled procurements that exceed the annual cumulative threshold. Schools and Departments shall make these types of purchases through a competitively bid process which will usually result in a contract. Cannot be used for ongoing, continuous, and regularly scheduled procurements. 63G-6a-408, R33-3

Small Purchases Thresholds for Individual Procurement Item(s) over $1,001: Annual Cumulative Threshold = $50,000 $1,001 - $50,000 REFERENCE UPDATED PROCUREMENT TRAINING G-6a-408, R33-3

Exceeding Small Purchases Purchases $50,001 and greater Schools and Departments shall work with Purchasing to conduct an invitation for bids, RFP, or approved Sole Source, depending on circumstances Invitation for Bids: Invitation for bids used to initiate a competitive sealed bid procurement. It shall: State the period of time bids will be accepted How/place bids should be submitted Description of procurement items sought Objective criteria to evaluate bids Required contractual terms and conditions Bids shall be opened publicly Evaluate bids according to criteria Award bid to lowest responsive and responsible bidder 63G-6a-601 through 612; R33-3

Exceeding Small Purchases Request for Proposals Should be used when the exact product is not known or when there are other factors that need to be considered besides the lowest price. Request for Proposal shall: Period of time proposal will be accepted Manner/place proposal be submitted Description of procurement items sought Description of subjective/objective criteria used Relative weight given to each score awarded for criteria Formula used to determine score awarded If multiple stages will be used Discussion may be conducted with respondent Evaluate proposals according to criteria Evaluation committee scores Award proposal to highest responsive and responsible respondent 63G-6a-701 through 711; R33-3

Pre-qualified Vendor Pools  Process to prequalify potential vendors to provide procurement items  Purchasing must issue a “request for qualifications”  Procurement process Qualifications may include:  Type of procurement item requested  The scope of work to be performed  The instructions and deadline  Minimum criteria  Period of time list is in effect – not longer than 18 months  May limit participation in bids/RFPs during period of time to potential vendors 63G-6a-402, 403, 404; R

Pre-qualified Vendor Pools- cont. Minimum criteria may include: Prequalification requirements; Performance rating criteria; and May not be so restrictive to limit competition If only 1 vendor results on potential list: Cancel the request for qualifications; and List may not be used Before making list public: Vendors, who did not meet min. qualifications, must receive a written justification statements stating why Within 30 days after day of deadline make list available to public Equal treatment of approved vendors shall use unbiased selection manner, for instance using a rotation system (alphabetically, numerically, or randomly) 63G-6a-402, 403, 404; R

Public Notice Notice for Invitation for Bids or a RFP (> $50,000) Public notice includes : Name of issuing School or Department Information on how to obtain a copy of the bid/RFP with submission requirements Date of opening/closing period General description of procurement items (can’t be too restrictive) Notice published: At least 10 days before submission is required and posted on Bidsync.com 63G-6a-406, 407; R

Sole Source Procurement Sole Source: Only if requirement is reasonably available from a single supplier Not sole source if: There is more than 1 potential bidder or respondent Procurement Officer determines in writing Only 1 source for the item Award to a specific supplier, service provider, or contractor is condition of a donation that will fund full cost of supply, service, or construction item Circumstances which there is only 1 source for a procurement item (compatibility of equipment, technology, software, accessories, replacement parts, or service) 63G-6a-802; R33-3

Emergency Purchases Procurement officer or designee may authorize emergency procurement without using standard procurement process when emergency condition exits Purchases exceeding $50,000 require additional approval. Procurement officer shall: Make the authorization in writing; State the emergency condition; and Ensure procurement made with as much competition as reasonably practicable while avoiding harm, risk of harm, to the public health, safety, welfare, or property 63G-6a-803; R33-3

Multiyear Contracts The District can enter into a multiyear contract resulting from an Invitation for Bids or RFP if: Determine it is in best interest of the District Bid/RFP clearly state term of contract and renewals, and condition, if any The District can not continue/renew multiyear contract after it ends unless it engages in a new standard procurement process Can’t exceed five (5) years, including renewal periods…..unless conditional criteria is met 63G-6a-1204

Artificially Dividing a Purchase Law~ It is unlawful to intentionally or knowingly divide a procurement into one or more smaller procurements with the intent to make a purchase. This includes: Making 2 or more separate purchases; Dividing an invoice/P.O. into 2 or more invoices/P.O.; OR Making smaller purchases over a period of time If violated~ Depending on amount of procurement varies the penalty from a class B misdemeanor to a 2 nd degree felony and possible termination. 63G-6a-408, 2305, 2306; R33-3-3

Gratuities Gratuity is… Anything of value, including: Money Loan at an interest rate below market value or terms more advantageous than offered generally on the market Award Employment Admission to event Meal Lodging Travel Entertainment for which a charge is normally made 63G-6a

Offering a Gratuity Who does this apply to? Interested Person - A person interested in any way in the sale of a procurement item or insurance to the District. Law~ It is unlawful for a interested person to give, offer, or promise to give a gratuity to a procurement participant or individual who the person knows is a family member of a procurement participant. If violated~ Depending on amount of gratuity varies the penalty from a class B misdemeanor to a 2 nd degree felony. 63G-6a

Procurement Participant Is a person involved in: Administering, conducting, or making decisions regarding a standard procurement process; Making a recommendation regarding award of a contract or regarding a decision to obtain a procurement item for a particular person; Evaluating a quote, a bid, or a response; or Awarding a contract or otherwise making a decision to obtain a procurement item from a particular person. 63G-6a

Accepting/Requesting a Gratuity Who does this apply to? A procurement participant. Law~ It is unlawful for a procurement participant to ask, receive, offer to receive, accept, or ask for a promise to receive a gratuity from an interested person. If violated~ Depending on amount of gratuity varies the penalty from a class B misdemeanor to a 2 nd degree felony and possible termination. 63G-6a , 2306

Hospitality Gift Hospitality Gift is… A promotional or hospitality item, including, a pen, pencil, stationery, toy, pin, trinket, snack, nonalcoholic beverage, or appetizer. This does not include money, a meal, a ticket, admittance to an event, entertainment for which a charge is normally made, travel, or lodging. 63G-6a

Acceptable Gifts Law~ The total value of all hospitality gifts given, offered, or promised to, or received or accepted by, the procurement participant in relation to a particular procurement is less than $10 in value. and The total value of all hospitality gifts given, offered or promised to, or received or accepted by, the procurement participant from any one person, vendor, bidder, responder, or contractor in a calendar year is less than $50. If violated~ Depending on amount of the gift varies the penalty from a class B misdemeanor to a 2 nd degree felony and possible termination. 63G-6a , 2306

Kickbacks Kickback is… A gratuity given in exchange for favorable treatment in a pending procurement or the administration of a contract. 63G-6a

Kickbacks Law~ It is unlawful for a person to give, offer, or promise to give a kickback to a procurement participant or to another person for the benefit of a procurement participant. It is unlawful for a procurement participant to ask, receive, offer to receive, accept, or ask for a promise to receive a kickback for the procurement participant or for another person. If violated~ Depending on amount of the kickback varies the penalty from a class B misdemeanor to a 2 nd degree felony and possible termination. 63G-6a , 2306

Unlawful Use of Position or Influence Law~ It is unlawful for a procurement participant to use the procurement participant’s position or influence to obtain a personal benefit for the procurement participant, or for a family member of the procurement participant, from an interested person. If violated~ Depending on amount of the benefit varies the penalty from a class B misdemeanor to a 2 nd degree felony and possible termination. 63G-6a

Utah Public Officers’ and Employees Ethics Act It is an offense for a public employee to: Use or attempt to use their official position to: Further their personal economic interest; or Secure special privileges or exemption for them or others Knowingly receive, accept, take, seek, or solicit, directly or indirectly for himself or another a gift of substantial value or economic benefit: Would improperly influence a reasonable person; Reward the public employee for action taken; or May be involved in any governmental action directly affecting a donor or lender Doesn’t apply to ( Non-Procurement Participant): Occasional gift, having a value not to exceed $50; or Award publicly presented in recognition of public services 67-16

What Should Purchasing Professionals Do?  Training of staff  Focus on Ethics Act (67-16); Procurement law (63G-6a); and rules (R33-3)  District policies and procedures  Understand small purchase limits and documentation requirements  Understand bid requirement levels  Flexibility is key - There are several procurement options that are available to purchasing professionals. These options assist in obtaining the best value, products, goods or services needed.

District Purchasing Staff Joe Bryant, Purchasing Supervisor Tonya Hodges, Buyer Tony Field, Buyer