Purchasing Policy and Bidding Requirements

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Purchasing PolicyandBidding Requirements

• Leadership Training
• May 3, 2007

by Rick Ashby, C.P.M., A.P.P. Davis School
District Director of Purchasing Materials
Distribution
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Lessons Learned Title I

• Forwarding of Approvals
• Sole/Single Source Requests
• Vendor Set Up
• Conflicts of Interest
• Ask Questions
• Require More Detail Documentation
• Keep Both Eyes Open

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Lessons Learned AG Investigation

• Specification Writing Development
• Proprietary Specifications (Sole/Single Source)
• Inadequate Justification Supporting
  Documentation
• Procurement Review and Approval
• Open Competition
• Ongoing Review Justification

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Purchasing Authority

• The Director of Purchasing is delegated
  authority by theBoard 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)

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Procurement Activities

• Definition
• means buying, purchasing, renting, leasing,
  leasing with an option to purchase, or otherwise
  acquiring any supplies, services, or
  construction.

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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,

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Procurement Activities (cont.)

• preparation, and award of a contract
• and all phases of contract administration.
• UPC 63-56-105

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Rule of Thumb

• What is a Procurement Activity?
• Generally, any activity that involves
• Vendors
• Specifications
• Pricing Negotiations
• Commitment of Funds
• Implementation Administration of Contracts

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Video Clip

• Who is responsible for the use of public monies?
• Who is accountable for the use of public monies?

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Procurement Controls

• Protect Public Funds from Misuse
• Avoid Financial Problems
• Build Public Trust
• Develop Healthy Vendor Relationships
• Efficiency vs. Accountability Responsibility

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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

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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

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Ten Commandments of Ethical Government Purchasing

• 1. Be Independent

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Ten Commandments of Ethical Government Purchasing

• 1. Be Independent
• 2. Act Only in the Public Interest

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics Money

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics Money
• 4. Follow the Law

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics Money
• 4. Follow the Law
• 5. Strive for Efficiency

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics Money
• 4. Follow the Law
• 5. Strive for Efficiency
• 6. Protect the Economy

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics Money
• 4. Follow the Law
• 5. Strive for Efficiency
• 6. Protect the Economy
• 7. Take Nothing, Ever

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics Money
• 4. Follow the Law
• 5. Strive for Efficiency
• 6. Protect the Economy
• 7. Take Nothing, Ever
• 8. Do Not Socialize with Vendors

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics 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

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Ten Commandments of Ethical Government Purchasing

• 1. Be independent
• 2. Act Only in the Public Interest
• 3. You Are a Trustee of the Publics 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
• Do Not Play Favorites
• 
  by Suzanne M.
  Dallimore, Esq.

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Higher Standards

• Applicable to Purchasing Dept. Staff Only?
• NO !
• Any person actingin any official capacity who
  participates in the procurement of supplies,
  services, construction, real property or
  insurance
• DSD Purchasing Policy 6F-103(14)

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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

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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.

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Applicability (cont.)

• all purchases made throughapproved 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)

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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)

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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/engineeri
  ng 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 gt 10,000 covered under an existing
  District or State contract
• Provided that

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Small Purchase Authority (cont.)

• 1. Three (3) written quotes are obtained for
  purchases gt 5,000 and lt 10,000 (retained by
  Purchasing)
• 2. Three (3) verbal quotes are obtained for
  purchases
• gt 1,000 and lt 5,000 (retained by
  school/dept.)
• 3. Quotes encouraged (not required) for
  purchases
• lt 1,000
• 
  DSD Purchasing Policy
  6F-103(5)

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Handout

• Small Purchase Procedure Decision Tree
• - Using District Funds
• - Using School Funds
• Bid Procedure Decision Tree
• - All purchases gt 10,000

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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

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Limited Authority

• Budget managers do not have authority to do the
  following without Purchasing Dept. involvement
• 1. Make purchases gt 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))

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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

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Ten Commandments for Public Bidding

• 1. Bidding Rules Emphasis Fairness Over Efficiency

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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

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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

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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

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Ten Commandments for Public Bidding

• 1. Bidding Rules Emphasis Fairness Over
  Efficiency
• 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

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Ten Commandments for Public Bidding

• 1. Bidding Rules Emphasis Fairness Over
  Efficiency
• 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

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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

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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

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Ten Commandments for Public Bidding

• 1. Bidding Rules Emphasis Fairness Over
  Efficiency
• 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

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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
• Bid Results are Public
• 
  Author - Unknown

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