PUBLIC PURCHASING IN FLORIDA

1. PUBLIC PURCHASING IN FLORIDA POST AWARD PROCESSES (REV. 09/07/05)

2. POST AWARD PROCESSES PURCHASE ORDER/CONTRACT FILE

3. PURCHASE ORDER/CONTRACT FILE • Agencies must maintain a contract file for each contract. • The file must include, but not be limited to [s.287.042(3)(e) FS]: • All pertinent information relating to the contract during preparatory stages. • A copy of the solicitation & related documents.

4. PURCHASE ORDER/CONTRACT FILE • The file must include, but not be limited to (cont): • Opening of bids/proposals, evaluation & tabulation. • Determination and notice of award.

5. PURCHASE ORDER/CONTRACT FILE • The chief procurement officer of each agency shall keep a record of all purchase orders [60A-1.016(3), FAC]. • Each agency shall designate at least one employee as a contract administrator, who will maintain a contract file and financial information on all contractual services contracts and serve as liaison with the contract managers and the department (DMS) [287.057(16)FS].

6. PURCHASE ORDER/CONTRACT FILE • Records will be maintained in accordance with the General Records Schedule published by the Department of State at http://dlis.dos.state.fl.us/barm/ • Records will be made public in accordance with s.119.07 and 815.045, FS.

7. POST AWARD PROCESSES CONTRACT MANAGEMENT

8. CONTRACT MANAGEMENT DEFINITIONS: WHAT IS CONTRACT MANAGEMENT? CONTRACT ADMINISTRATION? COMPARE NIGP AND FLORIDA STATUTES.

9. CONTRACT MANAGEMENT NIGP’s “CONTRACT MANAGEMENT” TEXT Contract Management: “All activity that occurs in the contracting process, i.e., all activities that take place from the establishment of the original requirement until the contract is closed out.”  Contract Administration: “The management of all actions, after the award of a contract, that must be taken to assure compliance with the contract; e.g. , timely delivery, acceptance, payment, closing contract, etc.”

10. FLORIDA CONTRACT MANAGEMENT S. 287.057(15): “For each contractual services contract, the agency shall designate an employee to function as contract manager who shall be responsible for enforcing performance of the contract terms and conditions and serve as a liaison with the contractor. The agency shall establish procedures to ensure that contractual services have been rendered in accordance with the contract terms prior to processing the invoice for payment.”

11. CONTRACT MANAGEMENT S. 287.057(16) “Each agency shall designate at least one employee who shall serve as a contract administrator responsible for maintaining a contract file and financial information on all contractual services contracts and who shall serve as a liaison with the contract managers and the department.”

12. CONTRACT MANAGEMENT • What kind of document is necessary? S. 287.058(1) “Every procurement of contractual services in excess of the threshold amount provided in s.287.017 for Category Two…shall be evidenced by a written agreement embodying all provisions and conditions…In lieu of a written agreement, the department may authorize the use of a purchase order…”

13. CONTRACT MANAGEMENT Addressing the award of competitive solicitations, PUR 1001, #16: “The Buyer shall issue a notice of award, … to successful respondent(s), however, no contract shall be formed between respondent and the Buyer until the Buyer signs the Contract .”

14. CONTRACT MANAGEMENT The notice of award may be any writing signed by the authorized agency representative, accepting the respondent’s offer, e.g. a letter or email of award, a purchase order, or a contract or agreement.

15. CONTRACT MANAGEMENT Who should manage a contract? • Generally, a representative of the entity responsible for the performance to be achieved through the contract. • In Florida state government, most contracts are not managed by purchasing agents, but by contract managers in program divisions, or special contract management organizations.

16. CONTRACT MANAGEMENT • A contract manager’s file should contain the contract, any amendments, and all reports, complaints, and correspondence materially related to the contract

17. CONTRACT MANAGEMENT What should be considered in managing a contractor’s performance? • Product specifications and/or service statements of work, such as “Deliverables,” (outputs) a definite or indefinite quantity of goods to be delivered and/or services to be performed, and  “Performance” (outcomes) to be attained.  Performance outcomes are often time-related quantity/percentage goals.

18. CONTRACT MANAGEMENT • Schedule • Budget/Financial issues   • Customer Service level Note: Performance measures, or outcomes can also apply to schedule, budget/financial and customer service issues.

19. CONTRACT MANAGEMENT • Outputs can usually be measured easily, like the number of training seminars or case files completed each year. • Outcomes may be tougher, from measuring savings or impact of a service, to determining the level of improvement to service delivery.

20. CONTRACT MANAGEMENT What is involved in contract management? • Reading & understanding the contract • Communication with the contractor • Maintenance of records & reports • Performance monitoring • Problem resolution/corrective action • Invoice approval • Closeout

21. CONTRACT MANAGEMENT • READ AND UNDERSTAND THE CONTRACT, identify • Responsibilities of the agency and the contractor (commodity specs, statement of work, obligations of the parties) • Pricing • Schedule, especially critical events • Performance Measures • Risks • Anticipate requirements evolution, and impact on Specifications, Scope of Work, Cost and Term of Engagement

22. CONTRACT MANAGEMENT • COMMUNICATE, e.g. pre-start meeting, and appropriate level throughout. Cover the four basic elements of contract performance: • Requirements, including: Outputs (Deliverables, tasks, standards/quality) and Outcomes (Performance measures).

23. CONTRACT MANAGEMENT • Schedule: milestones, completion • Budget: Contract delivered within original budget. Accuracy, adequacy and timeliness of invoices, invoice processing and payment. Financial reporting if required. Types of problems and how to handle. S. 215.422 FS requirements.

24. CONTRACT MANAGEMENT • Customer Service Level (communication, reliability, flexibility, problem resolution, change order negotiation, exceptions, complaints)

25. CONTRACT MANAGEMENT • MAINTAIN RECORDS AND REPORTS • Contractor’s Reports: Specify content and frequency, by whom to whom. • Contract Manager’s Record: Determine appropriate degree of detail required. May use spreadsheet or special software.

26. CONTRACT MANAGEMENT • MONITOR PERFORMANCE any of 5 ways: • Reports, e.g. Contractor’s reports • Samples: Scheduled or unscheduled samples(at quantity intervals or temporal intervals) • Exceptions (complaints) • Surveys of contract users/clients. • Direct 100% inspection/monitoring

27. CONTRACT MANAGEMENT • PROBLEM RESOLUTION • Lowest level and least formality necessary. Speak, write, meet. • Liquidated Damages • Complaints to Vendor. Copy State Purchasing with complaints. • Requests for Assistance. Send to State Purchasing. • Default, Cancellation and Suspension. Copy State Purchasing. • Reimbursement and cure of deficiencies, Reinstatement. Notify State Purchasing.

28. CONTRACT MANAGEMENT • PROCESS INVOICES. Review and approve if product/service billed has been delivered, or pre-payment authorized, charges are as per contract, and invoice detail is sufficient for a proper audit.

29. CONTRACT MANAGEMENT • CLOSEOUT: Evaluation, Payment, Analysis and Lessons for the future. .

30. CONTRACT MANAGEMENT • MAKE SURE IT GETS DONE: The contract manager is the agency’s front line resource for seeing that what is supposed to happen, actually happens

31. POST AWARD PROCESSES CHANGE ORDERS

32. CHANGE ORDERS • Change orders, or purchase order amendments, are not specifically addressed in Chapter 287, FS, or Rule 60A-1, FAC. • Consider this content to consist of recommendations, rather than rule or law.

33. CHANGE ORDERS Change orders are generally of two sorts: • Corrections of errors, omissions or contradictions within terms & conditions, or items/services to be delivered/performed • Addition, deletion or revision of terms & conditions or items of order.

34. CHANGE ORDERS • All change orders are themselves potential contracts or amendments to contracts, and must be executed by an agent, typically the purchasing officer. • Corrections should be made at the Purchasing Office level either upon request of the customer, or at the discretion of the purchasing officer, with concurrence of the customer. Some corrections may also require concurrence of the vendor, and other approvers in the customer organization.

35. CHANGE ORDERS • Customer requests for change orders should generally follow the approval requirements of the original order, unless merely corrections to errors made against what was originally authorized. Handle adequately, but not unnecessarily!

36. CHANGE ORDERS • Change orders are instruments equivalent to purchase orders or contracts, and subject to the same requirements for competition and contract clauses. In some cases, they are covered by the steps taken in preparing the original order, and in some cases, not.

37. CHANGE ORDERS • Example: Standard bid conditions (PUR 1000) allow additional purchases up to $25,000 within 90 days or award. Larger and/or later purchases would require new procurement processes.

38. CHANGE ORDERS • Change orders should be within the scope of the original order, i.e. issued within the term and prior to completion of the original order, consistent with the procurement method of the original order, or appropriately reprocured, covered by the referenced contract if any, and for similar or related products/services, subject to similar terms.

39. CHANGE ORDERS • CAUTION: Although orders may be amended by mutual consent, preserve your fiduciary responsibility and question proposed amendments which transfer risk or cost to the state. • FIDUCIARY: of, relating to, or involving a confidence or trust: as (a) held or founded in trust or confidence (b) holding in trust (c) depending on public confidence for value or currency.

40. POST AWARD PROCESSES RECEIPT AND ACCEPTANCE

41. RECEIPT AND ACCEPTANCE RECEIPT AND ACCEPTANCE ARE TWO DIFFERENT PROCESSES • "Receipt" of goods means taking physical possession of them. [672.103(1) FS]. • “Acceptance” of goods occurs when the buyer, after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that the buyer will take or retain them in spite of their nonconformity. [672.606, FS. See also 672.513 abd 672,601 FS]]

42. RECEIPT AND ACCEPTANCE • Receiving process: Count the packages and compare to the bill of lading document, and inspect for signs of possible concealed damages. Note any shortages or evidence of damages on the bill of lading, sign, and have the delivery person sign.

43. RECEIPT AND ACCEPTANCE Receiving process: • As soon as practicable, open and inspect the contents for condition and conformity to the order. • In the event of damages, preserve the packaging and contents, and contact the vendor to inform him, and for instructions on dealing with the carrier.

44. RECEIPT AND ACCEPTANCE Receiving process: • For non-conformity to the order, contact the vendor as soon as practicable. • If a partial order, authorize payment for usable portion received, if any, not less than 20 days after inspection, approval and receipt of invoice.[s.215.422(1), FS]

45. RECEIPT AND ACCEPTANCE • The buyer has a legal obligation to protect and preserve any goods under dispute: If the buyer has before rejection taken physical possession of goods in which he or she does not have a security interest … the buyer is under a duty after rejection to hold them with reasonable care at the seller's disposition for a time sufficient to permit the seller to remove them (672.602, FS)

46. POST AWARD PROCESSES INSPECTION, DAMAGES & CLAIMS

47. INSPECTION, DAMAGES & CLAIMS • Claims due to damages in shipment: Buyer must cooperate with seller in providing damaged shipment and its packaging to the carrier for inspection prior to settlement of the claim.

48. INSPECTION, DAMAGES & CLAIMS • Liquidated damages: Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. (672.718, FS)

49. INSPECTION, DAMAGES & CLAIMS General or Special Conditions of contracts often specify: • Liquidated damages (amount and circumstances) • Limitation of liability These terms reflect an apportionment of risk.

50. POST AWARD PROCESSES RELEASING OR CALLING A BOND