Introduction to ProcurementJune 5, 2014

Purchase Order Value (FY12/13)• Avg Cycle Time (PR to PO) – 2.56

days• PO Documents – 3,800

Background

~$44M Annual Spend + ~$1.6M Pcard!

All of the content presented herein can be located at:

http://www.bloomu.edu/purchasing

Expenditure of Public Funds – Policy 2010-01-AThe spending of public funds must clearly and directly benefit the university in support of its missionExpenditures of public funds may not inure to the private benefit of one or more individuals unless such expenditure is authorized by law All expenditures of public funds must be prudent and economical

Key compliance points: Consistency Adequate documentation supports:

There is no taxable benefit to the recipient No private inurement (benefit) Expenditure was incurred for the right reasons (advancement of university’s mission) Approvals

Background

Commonwealth Acts/Policy/Procedures:Title 62 Commonwealth Procurement Code (Act 57 of 1998)BOG Policy 1998-04 A (Procurement of Goods, Services and Construction)

Manual for Preparing and Processing Contracts for Goods and Services – Office of Chief Counsel/Office of Univ. Legal CounselContracting OfficerPrimary person delegated with contracting officer authority on behalf of the University, without financial limitations, is VP A&F. When absent, AVP A&F. Director of Procurement and Operations has purchases and contract authority to $100K.

No other individual has contracting signatory authority on behalf of the University unless delegated in advance and in writing by the President!

Fiscal OfficerPrimary persons with delegated authority as "fiscal officer" to review contracts and agreements, and to sign disbursement authorizations on behalf of the University, without limitation are: AVP A&F or Assist. Dir., Budget and Finance.

No other individual has fiscal authority on behalf of the University unless delegated in advance and in writing by the President!

Note – intentional segregation of duties to provide safeguards and oversight; mitigate potential risk.

Policy/Authority

Delegation of Authority

Type Description Cycle Time

Informal Quote May request under the bidding threshold Few days

Invitation for Bid (IFB) Normally used when the supply, service, or construction can be satisfactorily described and price is the only factor to be considered in the award, after bidder responsibility is determined

2-3 weeks

Request for Quotation (RFQ)

Typically issued from existing State/PASSHE contract at specified $ threshold

1-2 weeks

Request for Proposal (RFP)

When the contracting officer determines that the use of competitive sealed bidding is either not practicable or advantageous to the University. (a) Seeking a contractor's solution to a Univ. need; (b) Wants to give the offerors flexibility in the contents of their proposals in terms of the materials, services, or A/E offered; or (c) Has difficulty preparing a detailed procurement description.

3-4 months+

Invitation to Qualify (ITQ) Sometimes used to describe the solicitation document, process and umbrella contract for certain multiple-award contracts entered into by the Commonwealth. ITQs generally are solicited using an invitation for bids, which may be conducted through an electronic system (portal), and open to enrollment to qualified suppliers throughout the term of the umbrella contract.

1-2 weeks

Solicitation/Contracting Methods

Solicitation/Contracting Methods

Others

DGS/State Contract

PASSHE Contract

COSTARS

Various Purchasing Cooperatives:•PEPPM contract•TCPN Lowes contract•US Communities Astro Turf contract and Graybar contract•National IPA (Grainger only)

Solicitations Publically Advertisedhttp//www.ebidexchange.com/passhehttp://emarketplace.state.pa.us/

Thresholds and Process - MaterialsValue Requester Action Procurement Process Approx. Process Time

$0-$19,100 Provide verbal or written quotes but no formal bidding required. Should solicit 3 informal quotes, when possible.- Enter requisition- Purchases under $1,000 can use p-card (in accordance with published Pcard procedures) http://www.bloomu.edu/finance_busoffice/purchasing If using Pcard, do not also enter a PR

• PO Created• Signed by Authorized

Agent and sent to vendor

1-5 Days

>$19,100

- Enter requisition - Solicit at least 3 competitive quotes, where feasible, in advertising and bid process

IFB/RFQ or RFP Created

Bids Evaluated PO Created Signed by Authorized

Agent and sent to vendor

15-30 days

Thresholds and Process - ServicesProcess Requester Action Procurement Process Approx. Process Time

$0-$19,100 Enter Requisition Provide verbal quote—no formal bidding required

PO/SPC Created Sent to vendor for signature Signed by Authorized Agent (s)

5-10 days depending on vendor signature time

>$5000-$19,100 Enter requisition Provide any written quotes, but no formal bidding required

PO/SPC Created Sent to vendor for signature PO/SPC Signed by Authorized

Agent University Legal Review and

signature

10 -20 days depending on legal review

>$19,100-$20,000

Enter requisition Participate in advertising and bid process

IFB, RFQ or RFP Created Bids evaluated PO/SPC Created Sent to vendor for signature Signed by Authorized Agent and

sent to vendor University Legal Review and

Signature

<$20,000 = 10-20 days

>$20,000-$500,000

Enter requisition Participate in advertising and bid process

IFB, RFQ or RFP Created Bids evaluated PO/SPC Created Sent to vendor for signature Signed by Authorized Agent. Bus

Office and VP A&F (>$100K) University Legal review and

signature OAG Review and signature

>$20,000 = 30-90 days (OAG is allowed up to 30 days for signature)

Thresholds and Process - Services

Process Requester Action Procurement Process Approx. Process Time

>$500,000 Enter requisition Participate in advertising and bid process

IFB, RFQ or RFP Created Bids evaluated PO/SPC Created Sent to vendor for signature Signed by Authorized Agent University Legal review and

signature OGC Review and signature OAG Review and signature

90-180days (OAG and OGC signatures can take up to 30 days each)

Exceptions to Competitive Bidding

The Commonwealth warehouse Items on state (DGS, COSTARS or PASSHE), contracts May still require an RFQ Items available from agencies for persons with disabilities (such as

Pennsylvania Industries for Blind and handicapped) Certain items specified under grant or restricted gift provisions,

and Items procured under the sole source and emergency provisions

of the Commonwealth Procurement Code.

Purchase Requisition Review

Value Approval

$0-$5,000 Requisitioner (1)(2)

>$5,000  

Dean/VP 

(1) Procurement reviews for appropriate expenditure, price and source

(2) Budget validation

Special ApproversGeneral

Material Group

Description Approver Level

00172 DESKTOP PRINTERS Celli $200

00180 COPIER-PURC_RENT_EQ Celli $1,000

00252 COMPUTER SOFTWARE Celli $1,000

00260 COMPUTER HARDWARE Celli $299

00108 LIBRARY MATLS_SUPP Droll $1,000

00124 EQ_LIBRARY_ARCHIVAL Droll $1,000

00908 SRVC-PRINTING_PHOTO Mandel $1,000

00132 SIGNS_FLAGS_BANNERS/(LOGOS) McGuire $5,000

00140 PROMOTIONAL PRODUCTS Rush $5,000

00748 SRVC-ADVERTISING Rush $5,000

Types of Contracts and PO’s

Type Description/Use Encumbers Funds

Purchase Order (PO) (45)

Purchase of goods (i.e. computers, furniture, books). The PO is signed by the Contracting Officer.

Y

Service Purchase Contract (SPC) (40)

Purchases of services (i.e. consultants, performers, piano tuners). SPC’s are signed by the vendor, Univ. and legal counsel (OAG/OGC) based on $ value of contract.

Y

Outline Agreements (OA) (46)

• Facilitate repetitive orders to single vendor (Bottled H20, hearing aids, bulk commodities)

• Allows single contract to capture all associated PO spend. Issue separate PO’s that reference 46#

• Can be configured for multiple years with PO’s issued on annual year basis

• Can be configured for multi-using depts. (separate line for each)

N

Service Purchase Outline Agreement (SPOA) (47)

• Repetitive service requirements (Maint repair contracts)• Limit to $19.1K/yr• Actions:• Require new PO for each FY

N

Types of Contracts and PO’sType Description/Use Encumbers

FundsBlue Back Contract More complicated procurements and associated transaction (ex.

student loan mgt). Signed by the vendor, Univ., legal counsel, AG and OGC based on $ amount of the contract.

N

Construction Contract (39)

New construction, renovations and improvements to buildings. Construction contract signed by the contractor, Univ., legal counsel, AG and OGC based on $ value of the contract. (PO signed by Contracting Officer)

Y

Pcard Typically assigned a single transaction $ limit of $1,000; monthly $ limit of $3,000. Certain university operations may be assigned a higher per transaction or monthly dollar limit where appropriate and with the approval of the Procurement Department.

N(batch monthly

to expense)

Prohibited Contract ClausesPolicy:Assignment Clauses - No assignment without prior written consent of the University. Law of the Contract - The laws of PA must govern the contract or agreement. Attorneys' Fees, Court Costs, Entry of Judgment - The University may not voluntarily pay - the contractor's court costs or legal fees nor may it allow a contractor to confess judgment on its behalf.

Indemnity and Hold-Harmless Clauses - Removed from every Commonwealth contract because it compromises the greatest protection afforded the Commonwealth entities: Sovereign immunity. Arbitration Clauses - Resolution of disputes by binding arbitration in contracts for goods and services are prohibited. The Board of Claims has exclusive jurisdiction. Payment in AdvancePurchase of Insurance

Contracting for SpeakersSPC must be executed between BU and speaker/speaker’s booking agent prior to

engagement. 1. Initiate a Purchase Requisition (PR).

a. Lead times below must be followed: i. >$5,000 – 6 weeks prior to engagement to allow Procurement time to create contract, work through contract issues with the speaker, and obtain speaker and PASSHE legal counsel signatures; ii. $5,000 and <– 2 to 3 weeks prior to engagement to permit time to review, edit terms and obtain all signatures.

b. Include all pertinent information on the PR in SAP: i. Speaker’s quotation and/or contract (add as attachment to PR); ii. Name, address and phone number; iii. SSN of the speaker or EIN of the booking agent; iv. Speaker’s fee; v. Travel expenses (lodging, meals, mileage, etc.) – select one of the following methods:

Contracting for Speakers1. All Inclusive Fee (Preferred Method)

a. Establish a set fee with the speaker, agreed upon in advance, which includes all

expenses.

b. PR - Line 1 will state "Speaker's Fee-Note:

Bloomsburg University is not responsible for any travel expenses".

c. To determine reasonableness of included expenses,please reference current per diem and lodging rates and mileage calculator found on

Bloomsburg University's Travel Information webpage. Current rates for Bloomsburg are $77/day for lodging and $46/day for meals.

2. Travel Expenses Reimbursed to Speakera. Estimate of travel expenses must be in

accordance with university travel guidelines (see 1.c. above).

b. PR - Line 1 will state"Speaker's Fee".

c. PR - Line 2 will state "Estimated reasonable travel costs (lodging, meals,

mileage, etc.) - receipts required".

d. Item Text will state "Speaker will make travel

arrangements, pay for travel costs, and invoice Bloomsburg University accordingly".

3. Travel Arrangements Made by BUa. PR - Line 1 will state

"Speaker's Fee".b. Item Text will state "Bloomsburg

University will arrange and pay for travel costs (lodging, meals, etc.)".

c. Note: travel arrangements must be in accordance with university travel guidelines (see 1.c. above) and can be made using the purchasing card or purchase requisition system.

Contracting for SpeakersPayment processing:Standard practice - Speaker responsible for sending invoice for services provided to University in accordance with the terms outlined on the SPC. University depts/offices should not generate an invoice on the speaker’s behalf. However, if speaker is an individual not associated with a company or corporation, does not speak routinely in the course of his/her normal employment the department may prepare and submit an invoice on his/her behalf. This invoice should be signed by the speaker prior to departure. After the engagement, the invoice must be signed for approval by the respective department who initiated the speaker request. Refer to the link for this invoice form. http://www.bloomu.edu/documents/purchasing/GeneralInvoiceForm.doc If a speaker contracted for expense reimbursement, original receipts for actual expenses incurred must accompany

the invoice to substantiate expenses claimed and satisfy audit requirements prior to reimbursement (applies to options 2 and 3, above, only).

Payment will be made after speaking engagement has taken place and the requisitioner has approved the invoice for payment. Any exceptions to this rule must be approved by the Procurement office. Prepayment of speaker fees and/or expenses is only authorized under extraordinary circumstances (i.e., speakers from outside the US).

Upon approval of final invoice for the contract, indicate “final invoice” before forwarding to AP office for processing. By doing so, any remaining open commitment will be liquidated and funds returned to funds center holder’s budget.

Call the Procurement office if you have any questions or special circumstances.

Cautions• A person without delegation who

signs a contract is acting outside the scope of his/her employment and can be held personally liable for the obligation(s) created by the inappropriate signing of contract.

• This is also true for “after the fact” contracts (i.e. procuring a good or service without the advance approval of Procurement). BU cannot pay on an “unlawful” contract and the contractor’s only remedy is to proceed against BU via the Board of Claims or request approval of a settlement agreement.