Introduction to Procurement for Public Housing Authorities

1. Unit 4 Introduction to Procurement for Public Housing Authorities Small Purchase Procedures

2. Learning Objectives • Understand when to use small purchase procedures • Understand the basic process and requirements for small purchases • Understand basic requirements for micropurchases

3. Small Purchase Procedures • Used for less formal purchases • Allows PHAs to obtain equipment or supplies, or to seek professional services typically obtained via the formal solicitation process. • Simplest method of procurement

4. General Requirements • Independent Cost Estimate (ICE) is less than the $100,000 Federal Simplified Acquisition Threshold or lower threshold as specified in PHA’s Procurement Policy. • At least an adequate number (3 or more) of oral or written quotes via phone, fax or email, etc. should be obtained. • PHAs need to incorporate the provisions outlined under Table 5.1 in Chapter 5 of the Procurement Handbook into the purchase order, contract or agreement.

5. 12 Basic Steps for SPP • Develop a basic Statement of Work • Develop/reassess ICE • Determine if specifications are needed • Develop a potential list of bidders or offerors • Contact potential bidders/offerors via phone, fax or email • Discuss nature of solicitation (bid or proposal) with sufficient detail • Receive solicitations, preferably in writing

6. Small Purchase Procedures (cont.) • Determine that price is reasonable • Negotiate! PHAs can negotiate price and contract terms. • Award the contract by executing official document (e.g., purchase order) Contracting Officer’s signature satisfies the responsibility criteria of the successful offeror • Document the file Record of all actions taken Copy PO or agreement • Manage the contract award per established procedures at the PHA

7. Required Forms for Small Purchases Solicitation – no HUD mandated form; format based on action being procured Purchase Order or Contract Agreement – no HUD mandated format; however, the following attachments included in whatever format used: Mandatory Contract Clauses For Small Purchases Other Than Construction in Table 5.1, Procurement Handbook For construction/development contracts between $2,000 and $100,000: HUD-5370-EZ, General Conditions for Small Construction/Development Contracts For maintenancecontracts, including non-routine maintenance work, between $2,000 and $100,000, Section II, HUD-5370-C, General Conditions for Contracts - Non-Construction Contracts Any applicable wage determinations

8. Micro Purchases • A sub-category of SPP for purchases costing less than $2,000. • An ICE is not required! • Only one (1) quote required if price is considered reasonable • Signature of Contracting Officer signifies that price is reasonable based on prior prices paid recently or catalog prices in open market • de facto compliance with reasonableness test! • If used, purchases of like items should be equitably distributed among available suppliers. • Prior to repeating a purchase, a new quote should be obtained to verify that the price being paid is still reasonable. • PHA uses Purchase Order to document. • Wage rates are not required!

9. Remember… • ICE required (except for Micro Purchases) • Use SPP when ICE < Federal Simplified Acquisition Threshold of $100,000 or PHA’s lower threshold • Obtain at least 3 quotes for small purchases • For Micro Purchases solicitation of competitive quotes not required if price reasonable • Always include requirements in Table 5.1 of Procurement Handbook • Include other forms as applicable

10. References • 24 CFR 85.36(d)(1) • PHA Procurement Handbook7460.8 REV 2 - Chapter 5 • Table 5.1 – Mandatory Contract Clauses