Basic Purchasing Policies and Procedures Rutgers Educational Forum April 30, 2014

1. Basic Purchasing Policies and ProceduresRutgers Educational Forum April 30, 2014 ANNA MARIE WRIGHT, QPA CAMDEN COUNTY PURCHASING AGENT

2. VARIOUS LAWS • ITEMS COVERED UNDER THE VARIOUS LAWS • BID THRESHOLD • QUOTE THRESHOLD • DURATION OF CONTRACTS • TYPES OF PROCUREMENT • COOPERATIVES • MANDATORY BID ITEMS • SPECIFICATIONS • AWARD OF CONTRACTS • AGGREGATION • REJECTION OF BIDS • DISQUALIFICATION OF BIDDERS • PROCUEMENT LAWS • Laws to Regulate the Procurement of Goods and Services. • LOCAL PUBLIC CONTRACTS LAW N.J.S.A. 40A:11-1 ET SEQ. • PUBLIC SCHOOLS CONTRACTS LAW N.J.S.A. 18A:18A-1 ET SEQ. • COUNTY COLLEGE CONTRACTS LAW N.J.S.A 18A:64A-25.1 ET SEQ. • ADMINISTRATIVE CODE N.J.A.C. 5:34-1 ET SEQ.

3. KEY PROVISIONS OF THE LAW • TYPES OF PROCUREMENT • Competitive Contracting Request for Proposals • Hybrid of a bid and RFP • Advertised 20 days in official newspaper • Cannot be negotiated • Cooperative pricing, joint purchasing, regional cooperative and commodity resale contracts • Bid with a larger group of entities • Advertised 10 days in the newspaper • Cannot be negotiated (unless tie bid) • TYPES OF PROCUREMENT • Quote • Goods and Services • Does not have to be advertised • Can be negotiated • Bid • Goods and Services • Advertised 10 days in official newspaper • Cannot be negotiated (unless tie bid) • Emergency • must address public health, safety and welfare • Try to obtain quotes if possible

4. KEY PROVISIONS OF THE LAW EXCEPTIONS 40A:11-5 • Other listed exceptions included but are not limited to. • Publishing of legal notices 40A:11-5(1)(j). • The acquisition of artifacts or items of unique intrinsic, articistic or historical character 40A:11-5(1)(k). • Those goods and services necessary or required to prepare and conduct an election 40A:11-5(1)(l). • Library and educational goods and services 40A:11-5(1)(q). • Proprietary computer hardware and software 40A:11-5(1)(dd). • EXCEPTIONS 40A:11-5 • Professional Services 40A:11-5(1) (a)(i) • Examples – lawyer, architect, engineer • Extraordinary Unspecifiable Services (EUS) 40A:11-5(1)(a)(ii) • Construed narrowly in favor of open competitive bidding • Local Finance Notice 2002-2 • Insurance 40A:11-5(1)(m) • Purchase of insurance coverage and consultant

5. KEY PROVISIONS OF THE LAW • DURATION OF CONTRACTS 40A:11-15 • Two years – is standard unless the agency desires a shorter term. • Term may be for a longer duration as permitted in N.J.S.A. 40:A11-15 • Extensions are permitted by one (1) two year or two (2) one year terms using the index rate established by the DCA at the time of the extension. • Professional services no more than twelve (12) months. • Competitive Contracts up to five years. (40A:11-4.2) • BID LIMIT/QUOTE THRESHOLD 40A:11-3 • Bid limit is $36,000 with a Qualified Purchasing Agent • Bid limit is $17,500 without a Qualified Purchasing Agent • Quotes - 15% of the Bid limit • Two (2) quotes are required

6. KEY PROVISIONS OF THE LAW • COOPERATIVE PURCHASING N.J.A.C. 5:34-7.3 • Cooperative Commodity Resale System • Lead agency procures commodity and resells this to Cooperative members. • e.g. gasoline, diesel fuel, road salt • Regional Cooperative Pricing • Two or more registered Cooperative Pricing Systems and their participating units. • For Energy - Electricity, Natural Gas • COOPERATIVE PURCHASING N.J.A.C. 5:34-7.3 • Cooperative Pricing • Lead agency advertises for bids; awards a master contract with vendor for its owns needs and bid prices extend to co-op members; co-op member will issue own contract directly with vendor. • Joint Purchasing • Lead agency does the purchasing for members and certifies funding for themselves and members.

7. KEY PROVISIONS OF THE LAW • COOPERATIVE PURCHASING • Advantages and Disadvantages • Convenient • Flexible • Time Saving • Are there real financial savings? • COOPERATIVE PURCHASING • State Cooperative Purchasing Program • 40A:11-12 • State contract must be extend to you in order to use. • Quote from Vendor must be verified. • PO must have contract number and NJCP1. • National Cooperatives • Local Finance Notice 2012-10

8. KEY PROVISIONS OF THE LAW • EMERGENCY CONTRACTS 40A:11-6 • Must notify purchasing agent or person of authority. • SHOULD develop protocol in advance and have a written policy and procedure. • SHOULD try to obtain quotes if possible. • Failure to plan is NOT an Emergency! • EMERGENCY CONTRACTS 40A:11-6 • Must affect public health, safety and welfare and requires immediate deliver of goods or performance or services. • Must designate who can declare emergency within organization. • Should be the Official in charge. • When unavailable or incapacitated a designee will act on behalf of Official in charge.

9. KEY PROVISIONS OF THE LAW • MANDATORY BID REQUIREMENTS MUST BE SUBMITTED WITH BID 40A:11-23.2 • A listing of “specialty trade” subcontractors pursuant to N.J.S.A. 40A:11-16. • Acknowledgment of receipt of addenda. • Any document stated to be required by the agency. • MANDATORY BID REQUIREMENTS MUST BE SUBMITTED WITH BID 40A:11-23.2 • A guarantee (Bid Bond) - optional • Required when bid exceeds $100,000 for “construction” . • A certificate from a surety company (performance bond) optional. • Required when bid exceeds $100,000 for “construction”. • A statement of Corporate Ownership. (N.J.S.A. 52:25-24.2)

10. KEY PROVISIONS OF THE LAW • SPECIFICATIONS 40A:11-13 • A good specification shall: • Identify minimum requirements. • Allow for competitive bidding. • List reproducible test methods to be used for compliance. • Provide for an equitable award. • Well written specifications are essential • No loopholes for vendors . • But need to be fair to the vendors. • Capable of being met by several vendors. • Must be clear as to bid will be awarded. • Simple but exact. • SPECIFICATIONS 40A:11-13 • A specification is a statement of a set of requirements to be satisfied by a product, material or a process. • Any specification shall be drafted to encourage free, open and competitive bidding. • Specification shall require the furnishing of any “brand name” but may in all cases require “brand name or equivalent”.

11. KEY PROVISIONS OF THE LAW • ADVERTISEMENT 40A:11-23 • Must include • Bidders are required to comply with the requirements of P.L. 1999, c. 238, (N.J.S.A. 34:11-56 et seq.) where applicable. • Entities name and address. • Bid Opening Date and Location. • Bid number and description. • Package Pick up Location. • Pre-Bid information (if applicable). • ADVERTISEMENT 40A:11-23 • Bid – goods and services -minimum 10 days. • Bid – Solid Waste – min. 60 days. • Competitive Contracting – min. 20 days. N.J.S.A. 40A:11-4.5 • . Must include • Bidders are required to comply with the requirements of N.J.S.A. 10:5-31 et seq. and N.J.A.C. 17:27-1 et seq.

12. SAMPLEINVITATION TO BID • INVITATION TO BID • Notice is hereby given that sealed bids for Bid # • will be received, opened and read in public at the Camden County Division of Purchasing, Courthouse - 17th Floor, 520 Market Street, Camden, New Jersey 08102 on , at prevailing time by the Camden County Purchasing Agent or his designee. • Copies of the bid documents may be obtained at the Camden County Division of Purchasing during regular business hours. Copies of the bid documents may be obtained at the Camden County Division of Purchasing during regular business hours. Proposers can register to download all documents from the Camden County website: http://www.camdencounty.com/government/offices-departments/division-purchasing • All bidders are strongly urged to attend a non-mandatory pre-bid conference to be held at  on at prevailing time. • Proposers are required to comply with the requirements of P.L. 1975, c.127 (N.J.A.C. 17:27) and N.J.S.A. 10:5-31 et seq. and to comply with the requirements of P.L. 1999, c.238, (N.J.S.A. 34:11-56.25 et seq.) where applicable. • All bidders are responsible for obtaining complete bid documentation from the County at the address listed above. In the event of any inconsistencies between this advertisement, as published, and the bid documentation, the bid documentation shall control. • By order of the Board of Chosen Freeholders of Camden County, New Jersey. • Anna Marie Wright, Camden County Purchasing Agent

13. KEY PROVISIONS OF THE LAW • OUTSIDE THE LOCAL PUBLIC CONTRACTS LAW • Disclosure of Investment Activities in Iran. Public Law 2012, c. 25 • Prevailing Wage N.J.S.A. 34:11-56.25 et seq. • Public Works Contractor Registration Act N.J.S.A. 34:11-56.48 et seq. • Certification regarding debarment • Required for federally funded projects. • OUTSIDE THE LOCAL PUBLIC CONTRACTS LAW • Pay To Play N.J.S.A. 19:44A-20.4 et seq. • Affirmative Action NJ.S.A. 10:5-31 et seq.: N.J.A.C. 17:27 • Statement of Corporate Ownership N.J.S.A. 52:25.24.2 • Non Collusion N.J.S.A. 52:34.15 • Business Registration Act N.J.S.A. 52:32.44

14. PURCHASING POLICIES • Purchasing Policies • Outline management's Commitment to Ethical Behavior. • Know when to Buy • Right Quality, Right Quantity, Right Time, Right Place, Right Source, Right Manner • Purchasing Policies • To provide guidance and clarify purchasing procedures. • Defines Purchasing’s Roles and Responsibilities. • Defines the responsibilities of the using Departments.

15. PURCHASING POLICIES • Purchasing Policies Challenges • Purchasing professional must protect a public entity’s assets against the danger of loss or misuse. • They must ensure all procurement and financial transactions are properly authorized. • Policies should be adopted by the governing body. • Purchasing Policies Challenges • Purchasing managers must participate in the formulation of the policies involving purchasing issues. • Must clearly define what is expected of the using department. • Cannot operate in a vacuum.

16. PURCHASING POLICIES • Purchasing Policies Challenges • Purchasing Officials must manage all phases of the purchasing operation. • Reduce or eliminate rush orders. • Discourage favoritism and increase competition. • Have knowledge of buying trends and technology. • Purchasing Policies Challenges • Integrity, honesty and ethics are essential traits of a purchaser, as the money we spend is not our own. • Public purchasing officials must perform their job with sound business shrewdness and abide by statutory requirements.

17. PURCHASING FORMS • PURCHASING FORMS • Bid Boilerplate/Template • Bid Award Sheet • OPRA Request • Fixed Assets Form • Resolution/Ordinance • PURCHASING FORMS • Purchasing Manual • Advertisement • Requisition • Voucher • Purchase Orders • Emergency Purchase Form • Quotation Form

18. PURCHASING FORMS • PURCHASING MANUAL • Needs to address conflict of interest and ethical issues. • Needs to address the following. • Requisitions • Purchase orders • Required Signatures • Resolution or ordinance request • Guidance on bidding documents • Award of contracts • Record retention • Accounts payable procedures • PURCHASING MANUAL • Establishes and describes internal procedures. • Written for use by all personnel in the Purchasing Department and employees that perform the purchasing functions. • Manual should describe all of the steps of the purchasing function.

19. PURCHASING FORMS • QUOTATION NUMBER: • QUOTATION MUST BE RETURNED NO LATER THAN: _ _ • PRICES MUST INCLUDE DELIVERIES TO THE INSTITUTIONS. • Quotations must be made on these sheets; no other form will be accepted. • Camden County is exempt from any/all sales taxes. • The County of Camden reserves the right to accept or reject any part or parts thereof. • Delivery to be made not later thanIt is understood that prices include containers, except where specified. • SUBMITTED BY_________________________ • Phone Number/Fax:_________________________ • QUOTE FORM • Should have a sample solicitation of quotation record form for all using departments. • Should have all quotes in writing. • Quotes can be negotiated.

20. PURCHASING FORMS • REQUISITION • Description of goods or services • Quotes attached • State Contract number • REQUISITION • All required signatures • Internal vendor number • Business Registration Number • Account number

21. PURCHASING FORMREQUSITIONS

22. PURCHASING FORMS • PURCHASE ORDERS • An invoice is sent by the vendor which is cross-checked with the purchase order and documents specifying the goods have been received. • Invoice and voucher are submitted for payment. • PURCHASE ORDERS • Purchase orders are normally accompanied by terms and conditions which form the contractual agreement. • The vendor delivers the product or service and delivery is recorded.

23. PURCHASING FORMSCHANGE ORDERS • CAMDEN COUNTY DEPARTMENT OF PURCHASING • ADJUSTMENTS TO PURCHASE ORDERS INCREASE/DECREASE/CANCEL OR OTHER CHANGES • This form must be submitted in duplicate with a copy of original purchase order attached. • Department requesting the adjustment: _______________________________________ • Purchase Order Number: __________________ Buyer listed on P.O. ______________ • Account number(s) Purchase Order is charged to: _______________________________ • Check one: Increase ___ Decrease ___ Cancellation ___ Other ___ • Original PO amount: ______________________________________________________ • Amount of increase/decrease:_______________________________________________ • Total Dollar Amount of PO after Increase or Decrease: ___________________________ • Reason for Increase/Decrease/Cancellation or Change: ___________________________ • **PLEASE NOTE: Cancelled PO’s will not be printed…Attach this returned copy to your department copy for future reference.

24. PURCHASING FORMS • BIDDING PROCESS • Bidding Timeline. • Review of Bids Received with an award recommendation. • Bid Award – by resolution or ordinance. • BIDDING PROCESS • Process should outline the steps needed to be taken by the using department to start the procurement process. • Requisition to start the process. • Memo regarding cost estimate. • Sufficient funds for project. • Specifications or Scope of Work to be bid.

25. PURCHASING FORMSAMPLE BID SUMMARYSHEET • BID TITLE AND NO. _______________________________________________________ Camden County Purchasing • 17THFloor, Courthouse, Camden • BID RETURN DATE: _______________________________________________________   • ARCHITECT / SPEC WRITE: _______________________________________________ BID AWARD SHEET • TABULATION

26. CONCLUSION • A sound purchasing policy and procedure will help facilitate timely purchases and eliminate costly expenditures. • Always look for support from your administration and governing body. • Reach out to your purchasing peers for support and guidance.