New Procurement Rules Training

1. New Procurement Rules Training Purchases Greater Than $25,000

2. Why do we have new procurement rules? • Law that renewed mayoral control of the schools gave the Panel for Educational Policy (Panel) the authority to approve (among other things) • most of the DOE’s contracts • a new procurement policy that met specific requirements stated in the Law

3. Many processes are the same, but some things are new • New procurement processes • Emergency purchases • Demonstration projects • Innovative procurement methods • No more sole source for services • Must use Negotiated Services (fka Exception to Bid or Committee on Contracts) when there is only one source for services

4. What’s new (cont’d) • Request for Authorization - New Requirements • Now required for all procurements except • Simplified Procurement • All other procurements $25,000 or less ($15,000 if competitive sealed bidding) • Educational Investment Case • Required for technology, software, consulting or technical services contracts >$1 million

5. What’s new (cont’d) • Educational Investment Case (cont’d) • Describes the need for the project, how it fits within educational objectives • Key risks/dependencies • Cost benefit analysis • Client must provide information needed to complete • See Section 2-07 (c) for details • Contract changes • Dispute resolution process

6. What’s new (cont’d) • Performance evaluations for contracts – in development now, will provide training when procedures are completed • Contract Manager required for each contract and purchase order • Approves/monitors payments • Performs quality assurance, inspection and testing

7. New procurement processes (cont’d) • Contract Manager (cont’d) • Monitors/enforces contractor compliance with DOE security requirements, including fingerprinting • Monitors and evaluates contractor performance • Assesses need for changes, extensions and renewals • Participates in dispute resolution activities • Maintains file containing records, correspondence and determinations pertaining to contract administration

8. Overview of Most Common Procurement Processes • Request for Proposals (RFP) Process • Used to procure services or a combination of services and goods when evaluation of proposals is based on a number of factors including experience, staffing, suitability for needs and quality of vendor, in addition to price • RFP states what we want to procure in either general or specific terms, depending on the need • Client must prepare specifications

9. Overview of Most Common Procurement Processes (cont’d) • Request for Proposals (RFP) Process (cont’d) • Selection criteria must be established in the RFP • Solicitation must be advertised in City Record/DOE website if >$25K • A committee of at least three people, none of whom can report to another committee member, reviews the proposals and scores them using rating sheets.

10. Overview of Most Common Procurement Processes (cont’d) • Request for Proposals (RFP) Process (cont’d) • Proposers may be given feedback on their proposals, and as a result, may make changes to their proposals • Proposers may be asked to submit best and final offers (BAFO) • Process takes about five to twelve months or more depending on complexity

11. Overview of Most Common Procurement Processes (cont’d) • Multiple Task Award Contract (MTAC) Process (fka Prequalified Solicitation) • Used to procure services when there is high demand for a type of service (such as prof’l dev in a specific field) and when we want to offer a choice among multiple providers of the service • Contracts are awarded to every provider who meets the requirements of the solicitation

12. Overview of Most Common Procurement Processes (cont’d) • Multiple Task Award Contract (MTAC) Process (cont’d) • Client must prepare specifications • Selection process is the same as the RFP process • Process takes five to twelve months depending on complexity • DCP has a training session on ordering from MTACs

13. Overview of Most Common Procurement Processes (cont’d) • Negotiated Services • Used when other processes are not practical or possible including • need to extend a contract beyond the 12-month limit in the Contract Extension section • only one vendor can meet the DOE’s requirements • time constraints are such that only one vendor can provide the services

14. Overview of Most Common Procurement Processes (cont’d) • Negotiated Services (Cont’d) • a vendor’s services are discounted because another source of funding is covering a portion of the cost • Must document determination that it is not practical/possible to use a competitive process • Must publish notice of intent to award a contract in City Record/on DOE’s website, and evaluate responses, if any

15. Overview of Most Common Procurement Processes (cont’d) • Negotiated Services (Cont’d) • Chancellor’s Committee on Contracts (COC) approval is required for contracts > $100K • Client must provide specifications • Process takes six to twelve months (less time if < $100K)

16. Overview of Most Common Procurement Processes (cont’d) • Simplified Procurement • Used for goods $15K or less and services $100K or less • 3 bids are required to be solicited • Advertisement of solicitation is not required • No bids are required for services $5K or less

17. Overview of Most Common Procurement Processes (cont’d) • Simplified Procurement (cont’d) • Office heads can approve up to $25K; • DCP handles process >$25K • When DCP handles, client must prepare specifications • Process takes three or more months

18. Overview of Most Common Procurement Processes (cont’d) • Contract Extension • Can extend most contracts for up to one year • Exceptions: contracts awarded through a bid before 9/15/08; emergency procurements; simplified procurements beyond the $ thresholds; and grant-funded contracts whose extensions will be funded through tax levy funds • Must use all renewals or extensions provided for in contract first

19. Overview of Most Common Procurement Processes (cont’d) • Contract Extension (Cont’d) • COC approval is required for extensions >$100K and when COC approved original contract • Panel approval is NOT required • Process takes two to three months or less depending on amount

20. Overview of Most Common Procurement Processes (cont’d) • Contract Changes • Changes are permitted only for work necessary to complete the work in the original scope of contract and for non-material changes in scope • Can change the price and/or term of contract • Office heads can approve changes up to $25K • Exception: when there is a change in unit or task price and the original contract is > $100K, DCP approval is required

21. Overview of Most Common Procurement Processes (cont’d) • Contract Changes (cont’d) • COC approval is required for changes >$100K and when the COC approved the original contract and when there is an extension of the term • Panel approval is required when the change increases the contract cost by $25K or 10% of the original amount, whichever is greater • Process takes three to four months or more, depending on amount and complexity

22. Overview of Most Common Procurement Processes (cont’d) • Purchases Through Governmental Contracts • Used to purchase goods/services from State, City or federal contracts when the price is lower than the prevailing market price • Panel approval is not required • Some State contracts require a “mini bid” among contracted vendors • Process takes one to two months if no mini-bid, three to ten months or more if mini-bid is required

23. Overview of Most Common Procurement Processes (cont’d) • Section 1-03(b) and (c) Exceptions • 1-03(b) provides for exceptions to procurement processes • for grants that specify a vendor to perform the work • where court order, consent decree or law requires contracting with a specific source • 1-03(c) is used for City Council or Borough President budget line item pass through contracts • Process takes three to four months • Good idea to have providers respond to appropriate MTAC solicitation and get contract through that process – eliminates this process

24. DCP Contacts • Susan Dick-McKeon, Chief, School Based Procurement – 718-935-2027 • Peter Frey, Chief, Funded & Special Services Procurement – 718-935-4298 • Jason Henry, Innovation & Vendor Resources – 718-935-2058 • Jim McBride, Chief, Central Office Procurement – 718-935-5238 • Jay Miller, Vendor Research & Price Analysis – 718-935-4394 • Olga Nieves, Chief, Transportation, Food & Facilities – 718-935-2026