Mohave 101 for Vendors

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Mohave 101 for Vendors Standard Order
Process Rev. 11/3/11 JTP/CAM Mohave Educational
Services Cooperative, Inc. [phone] Kingman
[phone] Phoenix [phone]
Tucson (ASPIN) www.mesc.org
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Welcome This presentation was designed to help
you be successful with your Mohave
contract. Your feedback and questions are
appreciated and will help us develop future
presentations.
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Mohave 101 for Vendors

• Topics covered
• Background
• Rules
• Process
• Contract
• Marketing
• Members
• Quotes
• Orders
• Administration/Performance
• Invoicing/Payments
• Reconciliation Reports

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Purchasing can be characterized as a puzzle
requiring goods and services...
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Background How Do You Fit In?

• Mohave issued a formal Invitation for Bid or
  Request for Proposals, based upon Arizona laws
  and rules, and our members requirements
• Your company responded to the solicitation and
  has been awarded a contract
• The contract is an agreement to provide Mohave
  members with goods and services at agreed upon
  terms and prices
• Mohaves mission requires quality contract vendors

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Background Common Purchasing Terms
Bid Threshold (Bid Limit) the amount of money a
member is allowed to spend with a vendor in year
before they need to use a sealed competitive
solicitation. Bid Following a formal process,
bids are solicited via an Invitation for Bid
(IFB). The IFB contains certain requirements
permissions that form the basis of a procurement
contract. Award is to the lowest responsible
responsive bidder. Proposal Following a formal
process, proposals are solicited via a Request
for Proposals (RFP). The RFP contains certain
requirements permissions that form the basis of
a procurement contract. Allows for best final
offers. Awarded to the vendor whose proposal is
determined to be most advantageous to the buyer
based on criteria. Quote A process where
members request and review pricing from multiple
vendors as required for purchases under the bid
threshold, or a price quote based on a Mohave
contract. Due Diligence The process members
use to confirm a cooperative contract complies
with applicable rules, regulations and statutes,
and that any purchase complies with the
contract.
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Background Common Mohave Terms
Member Arizona City/County/K-12/with signed
Mohave Cooperative Purchasing Agreement. Contract
Vendor Vendor with a Mohave contract
award. Mohave Contract Price The current
approved price for item under a Mohave
cooperative purchasing contract. Administration
Fee One percent charge on goods and services
sold under contract that funds Mohave. It is
included in your contract pricing. Volume
Discount Reduction in contract pricing for
large volume orders. Must be approved by Mohave
in advance. Promotional Pricing A temporary
reduction in contract pricing. Must be approved
by Mohave in advance.
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Background Common Mohave Terms, cont
Reconciliation Report Monthly report due to
Mohave to pay administration fee for payments for
items sold under contract Open Order Report
Monthly report sent by Mohave to vendors to
obtain status on outstanding orders. Order
information is available on-line as well.
Product/Vendor Finder Online database of
Mohave contracts, with descriptions. Change
Order A revision to a processed purchase order.
All change orders must follow Mohaves
process. Substitution Providing a different
item than the one specified on the purchase
order. No substitutions are allowed without a
change order.
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Rules Rules and Member Procurements

• The rules exist in the form of statutes, codes,
  ordinances, policies, and regulations
• The rules apply to everyone, and the rules are
  not optional
• Although the rules are specific, they do not
  provide clear answers for all questions
• Certain personnel are charged with enforcing the
  rules
• When enforcing the rules, those individuals are
  doing their jobs, not throwing up roadblocks to
  prevent you from doing yours
• Mohaves processes and contracts are designed to
  make sure that we all follow the rules and get
  the job done

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Rules Mohave Procurement is Governed By

• Arizona Revised Statutes
• Title 41, Chapter 23 (Arizona State Procurement
  Code)
• Title 34, Chapters 2 6 (Public Buildings)
• 15-213-A (School Procurement)
• 38-305 (Conflict of Interest)
• Arizona State Board of Education School District
  Procurement Rules
• Often called the school procurement rules,
  school procurement code or procurement rules
• Apply to all school procurement with values over
  the bid threshold (currently 50,000)
• Applies to resolution of procurement protests and
  contract claims

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Rules Members Must Also Follow

• Local Ordinances
• Laws adopted by local government such as cities,
  counties and towns.
• Governing Body Policy
• Sets local requirements for a member entity.
• Generally defines procurement authority and the
  rules to be followed.
• Uniform System of Financial Records (USFR)
• Developed by the Arizona Auditor General for
  school districts.
• Sets competitive quotation requirements for
  purchases with values under the bid threshold.
• Specifies that purchase orders should be prepared
  for most expenditures.
• Specifies that a school district with liabilities
  payable on June 30 must prepare an Advice of
  Encumbrance, allowing the district to pay
  invoices with encumbered funds for up to 60 days
  after the close of the fiscal year.
• After the encumbrance period no further payments
  may be made from prior year funds.

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Rules - Sample Penalties

• A person who contracts for or purchases any
  material, services or construction in a manner
  contrary to the requirements of this chapter, the
  rules adopted pursuant to this chapter, the rules
  adopted by the state board of education pursuant
  to section 15-213 or rules adopted by the Arizona
  board of regents, the Arizona lottery commission
  or the judicial branch pursuant to section
  41-2501 is personally liable for the recovery of
  all public monies paid plus twenty per cent of
  such amount and legal interest from the date of
  payment and all costs and damages arising out of
  the violation. (A.R.S. 41-2616(A))
• A person who intentionally or knowingly contracts
  for or purchases any material, services or
  construction pursuant to a scheme or artifice to
  avoid the requirements of this chapter, rules
  adopted pursuant to this chapter, rules adopted
  by the state board of education pursuant to
  section 15-213 or rules adopted by the state
  board of regents, the state lottery commission or
  the judicial branch pursuant to section 41-2501
  is guilty of a class 4 felony. (A.R.S.
  41-2616(B))

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Rules - Cooperative Purchasing

• Mohave contracts are cooperative purchasing
  contracts.
• Cooperative purchasing contracts are an option
  for satisfying competitive procurement
  requirements.
• Multiple public procurement units can share
  contracts, when the contracts meet the
  requirements of the applicable rules.
• The administering agency may be authorized to
  collect a fee to cover the costs of administering
  the cooperative purchasing contract.
• The buying agency remains responsible for
  compliance with all competitive procurement
  requirements.
• If the administering agency meets the competitive
  procurement requirements, then the using agency
  is considered to have met the requirements, just
  as if it had gone to bid itself.
• Mohave contracts are not a way to avoid
  competitive purchasing, but a means to satisfy
  the competitive purchasing requirements.

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Process Influences On Purchasers
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Process Large Dollar Purchase Cycle
Purchase Cycle Using Mohave Need is
recognized Quotes obtained Requisition
prepared Account code funds review Purchasing
review Purchase order prepared issued Vendor
receives PO Vendor delivers Buyer receives
verifies A/P verifies pays Goods are used
Normal Member Purchase Cycle Need is
recognized Quotes obtained Requisition
prepared Account code funds review Purchasing
review Purchasing prepares IFB/RFP Purchasing
issues IFB/RFP Bids/proposals received Bids/propos
als opened Bids/proposals evaluated Contract
awarded Purchase order prepared issued Vendor
receives PO Vendor delivers Buyer receives
verifies A/P verifies pays Goods are used
Normally this process takes 6 weeks or more to
get to the order phase. Your Mohave contract
shortens the cycle substantially because we have
already done the competitive procurement.
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Process Mohaves Order Cycle

• Mohaves standard (most common) order cycle is
• Member contacts Vendor for quote
• Member issues PO in Vendors name
• Member forwards PO to Mohave for review
• Mohave reviews order, applies MESC Reviewed
  stamp
• Mohave emails stamped Member PO to Member and
  Vendor
• Vendor receives stamped PO, provides
  product/services
• Vendor invoices Member
• Member pays Vendor
• Vendor sends admin fee reconciliation report to
  Mohave
• Vendor remits admin fee monthly
• Mohave audits selected purchases
• To ensure success, include your Mohave contract
  number on quotes and invoices.
• Remind members to list your Mohave contract
  number on their POs.

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Marketing Marketing Your Contract

• Mohave attends trade shows, member meetings and
  other events to help make members aware of the
  contracts we have available.
• Vendors need to market their contract to be
  successful.
• Include your Mohave contract number on business
  cards, advertising, promotional materials.
• Use Mohaves logo for marketing efforts by
  requesting approval from your contract
  specialist.
• Obtain and review your Mohave contract.
• All discussions, promises, quotes, etc., must be
  in exact accordance with the written contract.
• If it is not in the written contract, it is not
  part of the contract.
• When in doubt, ask your contract specialist.

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Marketing Mohave Contract Advantages

• Vendors receive
• Contracts that comply with the procurement law
• Access to hundreds of agencies throughout the
  state
• Ability to respond to one solicitation rather
  than dozens
• Assistance with payment/performance controversies
• Opportunity to offer volume pricing as of a
  result of the needs of Mohaves large membership
• Members receive
• Quality contracts that comply with procurement
  law
• Immediate access to volume pricing
• Immediate access to contracts for a variety of
  quality goods, services and construction
• Immediate access to contract documents (including
  pricing) and due diligence materials
• Assistance with payment/performance controversies
• Excellent value from effectiveness, efficiency
  and economy

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Marketing Who will we be working with at
Mohave? Contract Specialist This is the first
person to contact for assistance with contract
questions. As the contract administrator,
responsibilities include pricing update reviews
and approvals, contract interpretation, answering
contract questions and assistance with contract
controversies. Procurement Specialist This is
the person to contact with purchase order
questions. The specialist reviews, logs and
forwards orders and requests information from
members and vendors to clarify issues with orders
and quotes. Accounting Specialist This is the
person responsible for tracking and processing
reconciliation reports and payments, as well as
auditing selected purchases. To find your
contract, procurement and accounting specialists,
go to your contract record on our Product/Vendor
Finder. Contact information for all Mohave staff
is available on the contacts page on our website.
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Members Who are the members?

• Mohaves members include
• Public school districts, government entities that
  are political subdivisions, and Internal Revenue
  Code 115 qualified nonprofit educational or
  healthcare institutions
• 501(c)(3) nonprofit organizations are not
  eligible for membership
• Charter schools are not eligible for membership
• Obtaining a 115 exemption from the Internal
  Revenue Service is not common. Any organization
  with such an exemption will have a private
  taxpayer ruling from the IRS.
• How do I find out if ___________ is a member?
• A list is available on our website
• How do new members join?
• Eligible entities may download and complete our
  Cooperative Purchasing Agreement (CPA). There is
  no cost to join. Members pay as they go.

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Quotes

• Detailed quotes expedite purchases by providing
  all of the information required to purchase
  products or services and confirm contract
  compliance
• Make sure the product or service is included in
  the contract before quoting
• Quote the exact product or service, as it will be
  provided
• Quote the current contract price
• Include all pertinent product information (brand,
  model, size, finish, etc.)
• Include any conditions or expectations associated
  with the quote
• Remember
• Mohave must approve any price/product changes
  before they are quoted tomembers, including
• Product or service additions
• Any price changes (increases, decreases, volume
  discounts, promotions, closeouts, etc.) before
  they are offered to members

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Tips for successful quotes
Sample Quote
Dated and numbered, with revisions and updates
noted Provide an end date, and any other
conditions. Representatives name List applicable
Mohave Contract. Identify part number, and
other information necessary to identify Identify
any pass-through or non contract items Use
estimates if/when appropriate
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Orders Purchase Orders

• Generally must be issued before materials,
  services or construction items are ordered or
  received
• Create procurement contracts between the buyer
  vendor
• Place certain obligations on the buyer vendor
• Possess certain permissions restrictions
• Authorize the purchase performance only in
  accordance with the purchase order
• Should not be revised or exceeded without
  approval from the members purchasing department
  and Mohave
• Acting before a purchase order is issued or
  amended may create an after the fact purchase
• Do not begin any work under contract until you
  receive an MESC reviewed stamped PO. Generally,
  public entities cannot be held responsible for
  after the fact purchases

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Purchase Order Issued Then MESC Reviewed
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Mohave reviewed member purchase order with the
MESC Reviewed Stamp
Mohave contract number Price confirmed item MESC
REVIEWED stamp Amount of admin fee and pass
through items File name for the price list Mohave
used to confirm sample of price The Mohave
approved PO is emailed to specified vendor and
member contacts.
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Orders How long does it take to get a MESC
Reviewed purchase order?

• There are a number of factors that contribute to
  purchase order turn-around time, including
• Mohave has not received the PO from the member
• Missing Mohave contract number
• Incomplete purchase description (quantity, brand,
  color, model, etc.)
• Slow response to a request for missing or
  incorrect information
• Non contract item on PO
• Non contract price on PO
• PO is not signed
• After the fact purchase
• Average processing time for a Mohave PO in 2010
  was less than 1 day!

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Contract Administration
Most Mohave contracts are good for one-year, with
up to four, one year renewals possible. Contracts
with low volume or those that are not performing
well are not renewed. Performance under contract
is monitored and is a consideration in contract
renewals. It may also be used as a past
performance indicator for future Mohave
solicitations. The contract has requirements for
keeping contact information, pricing, and other
key information up to date. Advise your contract
specialist of any changes.
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Contract Administration Updating pricing

• Mohave contracts allow for pricing changes,
  including price updates, product or services
  additions, promotional pricing and volume
  discounts
• Price changes must be submitted to and approved
  by Mohave before they are offered to members
• Email requests for price changes to your contract
  specialist
• Include all required information in your price
  change request
• Generally, price changes are processed within
  five days
• Do not offer the price change to members until
  you receive emailed approval from the contract
  specialist
• Requirements for price changes are located in the
  contracts terms
• To expedite our pricing review, prior to
  submitting your request please examine the
  Pricing section in the General Terms and
  Conditions of your contract to determine the
  requirements for the change you are requesting.

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Contract Administration Common Member Mistakes

• Not allowing enough time for the process
• Not asking questions up front
• Incomplete documentation
• Ordering receiving materials or services
  without a purchase order
• Failing to inspect confirm an order upon
  receipt
• Failing to send receiving documents to Accounts
  Payable
• Signing contractual documents without authority
• Requesting products and services not on contract
• Requesting special pricing concessions as a
  condition of making a purchase

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Contract Administration Common Vendor Mistakes

• Quoting outdated pricing
• Quoting lower than contract pricing
• Quoting non contract products or services
• Quoting price changes prior to Mohave approval
• Providing goods or services based on end user
  direction/requests rather than in compliance with
  the contract
• Acting before receipt of a MESC Reviewed PO
• Providing goods or services in excess of the
  amount in a blanket purchase order
• Changing products or services without a MESC
  Reviewed change order
• Not responding to open order reports

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Contract Administration Problem Resolution
Multiple sides to every story Mohave will act as
an intermediary, when requested Mohave will seek
a contractually sound, fair and reasonable
resolution Vendor contract violations may result
in a notice of concern, a contract deficiency
notice, suspension of a contract, termination of
a contract, or no contract award on future
procurement solicitation Member contract
violations may result in rejection of that
members purchase orders, suspension of member
privileges, or termination of member
privileges We cant help unless we are contacted
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Invoicing/Payments

• Invoice members after products/services have been
  delivered/performed.
• Progress billing is permitted if the member
  agrees.
• Members payment terms are Net thirty (30) days
  from receipt of invoice.
• Members who do not pay as per the contracts
  terms are in violation of their Cooperative
  Purchasing Agreement.
• Quick pay discounts may be offered, but must be
  done as per your contract, as approved by Mohave.

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Vendor Reconciliation Reports
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Recon Reports - Accounting Orientation

• Per the terms of your contract, Reconciliation
  Reports are due on your Mohave assigned due date.
  Reports are due monthly, regardless of whether
  orders have been received or invoices have been
  paid. If there are no payments to report, send an
  email to adminreport_at_mesc.org stating nothing to
  report. Our Accounting Orientation Process has
  been set up by Mohave to aid in reporting your
  actual sales.
• As many new awardees are not familiar with our
  reconciliation process, we want to be proactive
  and provide guidance early if needed. When the
  first purchase order on a contract is logged into
  Mohave's system, it triggers our initial review
  process. That review will include our Accounting
  Orientation Process.
• As part of this process your assigned Accounting
  Specialist will email your Reconciliation Contact
  the following
• A sample recon report
• Guidelines for what is and is not adminfeeable
• Our Reconciliation Report Tutorial
• After that email is sent, the Accounting
  Specialist will call the Recon Contact to
  introduce themselves, offer answers to questions
  about the process and will offer to help create
  the first recon report.
• As a reminder
• Reconciliation Reports are emailed to
  adminreport_at_mesc.org
• Checks for admin fee payments should be mailed to
  Mohaves main office at 625 E Beale St, Kingman,
  AZ 86401.

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Summary - Reminders

• Obtain and keep a copy of your contract
• Read, understand and follow your contract
• Keep pricing complete and up-to-date, provide
  timely updates as required
• Quote only current contract pricing
• Provide accurate quotes, timelines and essential
  information
• Wait to provide goods and services until you
  receive the MESC Reviewed PO
• Provide goods and services only as specified in
  the MESC Reviewed PO, unless you receive a
  MESC Reviewed approved change order
• Do not exceed the value of a blanket PO
• Invoice in accordance with the contract and the
  MESC Reviewed PO
• List your Mohave contract number on all quotes
  and invoices
• Use our resources (website, Expo, newsletter,
  etc.)
• When in doubt ask!

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Summary Key Resources

• This presentation covers a lot of information.
  If you want a reminder at a later date or someone
  new joins your team, the following resources are
  available on our website to help you be
  successful with your Mohave contract
• A copy of your contract www.mesc.org/contract_doc
  umentation.html
• The Mohave Vendor Handbook www.mesc.org/vendor_ha
  ndbook.html
• The Mohave Product/Vendor Finder
  fm.mesc.org/pvf_home.php
• Includes a downloadable user guide to share with
  members
• The Training Corner www.mesc.org/training_corner.
  html
• Includes a general reconciliation report
  tutorial, a due diligence tutorial, updates of
  this presentation and more.
• Additional guidance is issued in
• eNewsletter Mohaves bimonthly email newsletter
• eNewsflash Periodic emails with important
  updates

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Mohaves Mission
Our mission is to save members time and money by
providing cooperative contracts and procurement
support for quality products and services. We
can only accomplish our mission with quality
contract vendors.
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Thank you!
For complete contact information go
to www.mesc.org/contact_us Mohave Educational
Services Cooperative, Inc. [phone] Kingman
[phone] Phoenix [phone]
Tucson (ASPIN)